Wednesday, September 21, 2011

Property Tax Lawsuit Takes Expected Step Back, Legal Fight Continues

Post and stock photo (of a house that's probably over-assessed) by the Hawthorne Hawkman.

A lawsuit alleging that property tax assessments are unfairly calculated so that lower-income neighborhoods are paying more than their fair share has been dismissed on a technicality.  A brief NXNS recap of links:  the lawsuit documents can be found here, CURA mapped out where in Minneapolis people are paying assessments that are either more or less than market value, I posited that perhaps the key question is whether a post-foreclosure sale from a bank to an individual counts as a forced sale, and a Minneapolis assessor didn't answer that direct question. 

So where does the lawsuit stand now?  Well...

...the dismissal may actually be a good thing.  If the plaintiffs had won the initial round, the ruling would be limited to just the years for which the plaintiffs were suing and would also be binding only to the parties bringing the action forward.  Instead, what happened was that the judge tossed the suit largely on the grounds that the plaintiffs had prior opportunities to challenge the assessed value and did not do so.

The state Supreme Court's rulings though, are binding on everyone.  From that perspective, the Supreme Court is actually a better forum for this argument to be heard.  The whole point of the suit is to address what the plaintiffs attest are structural injustices inherent in the city's assessment process.  If they prevail at the state, that will go a long way towards forcing appropriate changes in the city's tax structure.

(Or from the city's perspective, if the defendants win here, then it will validate their position that they've been doing it right all along.)

Either way, this has always been viewed as a two- or three-year process, with year one including an expected setback.

9 comments:

  1. Expected something like this to happen. The complaint document reads more like a manifesto than a lawsuit. No matter what the merit of this suit (and it's not without merit) it wasn't written as tightly as it needed to be written; the approach was a bit scattershot.

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  2. I don't like to see property owners trying to get out of paying their fair share of taxes. We renters have to pay taxes via our rent and we have no recourse. Regardless of the property taxes we pay the same rent. I would like to see these property owners contribute what they owe to keep city services running properly. Have you SEEN the potholes in north minneapolis? We need funding to ensure we have parks, water, sewer, road maintenance and police and fire. Perhaps we could have better things if people would just pay what is fair and move on with their life.

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  3. Not sure which side of the argument you're on, anon 7:39, but the whole point of the lawsuit is that people may not be paying what is fair.

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  4. Sounds to me like they are trying to use the legal system to get out of paying their taxes. If they are successful it will raise the overall rate on all taxpayers. The money won't come out of thin air. If they win and the city reduces the market values to reality then we won't have enough revenue to fund all we need to maintain our high quality of life. Thus rates will be raised on all property owners. These people need to realize that they are fortunate enough to own property and not rent and should pay what they owe.

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  5. Let's assume for a moment, anon 1:34, that the plaintiffs and their attorneys are correct, and that they eventually win in court, and that victory does in fact force a change in how properties are assessed across the city. I do agree with you that the needs and wants of the city and its taxpayers must still be financed somehow.

    The map CURA put together seems to me a pretty clear indication that our current system has some fundamental injustices. If the plaintiffs win, we will likely see assessed values rise in some areas of the city and decrease in others. The overall tax rate may increase as well. But the end result will be an assessment and taxation process that is fairer.

    Or, of course, they could lose and we'll find that the metrics used by the city are pretty fair after all. But look at the CURA map and tell me if you think that's really the case right now.

    Your argument that people should just be thankful for owning property and not concern themselves with the overall fairness of our government has no merit whatsoever.

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  6. Just Another Nomi HomieSeptember 22, 2011 at 3:47 PM

    It’s a myth that falling values will mean lower property taxes. Values may rise or fall, but the amount you pay as a resident isn’t tied directly to values. Rather, what you pay depends on the total levy amount, the entire burden of state, county and local property taxes divided across the various taxing districts—school, city, park, hospital, fire. When those levies rise or fall, your property taxes do likewise.

    About half of your property tax bill goes to the state and schools. Cities get about 17 percent, the county gets 18 percent

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  7. Tenants are getting a raw deal from the city in the coming budget, critics say — hit with shrinking services and higher property taxes buried in their rent.

    The city is looking to cut underperforming bus routes, reduce a grant program that helps tenants fight landlords, hike recreation fees and slightly increase taxes on apartment buildings.

    “We have frankly screwed tenants,”

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  8. What a bunch of morons! I called the attorneys when I saw the suit that was filed and told them,
    1. The city/county will make a motion to get this kicked to tax Court - it happened!
    2. The city/county will then make a motion that the case was not timely filed - it happened!
    Dumb ass atorneys create bad law when they appeal - luckily there was no concrete issue here that was at issue....PHEW!!!!

    As far as passing on costs to tenants, another joke. Rents are lower than they werem 10 years ago!

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  9. I hve had 4 rental homes in North Mpls for 30 years now. My "net rental income" is back where it was 25 years ago with taxes so high and water bills so high and other costs through the roof. I wish I had sold these when the fake market hit 5 years ago!

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