Property taxes have gone up substantially in Minnesota’s rural townships over the last decade, a new report shows. The tax money filled the gap left by declining state aid.
“As the state and federal government give less to our towns, more of the cost of maintaining our roads and ditches in towns is going to be placed on property tax payers,” State Auditor Rebecca Otto said.
The report from Otto’s office shows local property taxes accounted for 73 percent of the average township budget last year. That’s a huge increase from ten years ago. Then, property taxes accounted for only half of the average township budget.
About 18 percent of Minnesotans live in townships. They tend to be in rural areas and most have fewer than 300 residents.Townships generally have lower taxes than cities do, and their budgets have few frills. More than half of township spending goes to road maintenance.
Source: Minnesota State Auditor
“Costs of gravel have gone up at extremely rapid rates, costs of asphalt for those who have paved roads,” Minnesota Association of Townships attorney Kent Sulem said. “Our actual expenses do not go down, but our sources of revenue have depleted rapidly.”
Townships haven’t been eligible for local government aid since 2000. Other forms of state aid have dried up over the years as well.
“The only resource left is the property tax,” Sulem said.
The state auditor’s report is based on last year’s data. Sulem expects to see township taxes continue to rise in the coming years due to the elimination of another state aid program called the homestead credit.