John Spry, a finance professor at the University of St. Thomas, spoke with KSTP about St. Paul Park’s proposed 1.8% tax levy increase, one of the lowest proposed increases in the Twin Cities metro. Spry explained how slower spending growth can help cities limit levy increases and how residents’ perceptions of local government services can be reflected in home values.
From the story:
Washington County also increased the valuation rate of homes there by 4.1%. Franke said the city is budgeting for less than that, which reduced the tax bill.
Economist John Spry of the University of St. Thomas said smaller towns typically have smaller payrolls and provide fewer services.
He said slower spending growth can also help keep levy growth down.
“If your spending growth is slower, your property levy growth doesn’t have to be as high,” Spry said.
What happens next?
Spry said a lower rate can also help local governments if residents approve of what leaders are doing. He said that can show up in elections and in home values.
“If people like what the local government is doing, then you should not only see that local officials are doing well in elections, but you also see that’s helping home values,” Spry said.
