By Nancy Huddleston, Editor

Moving into the top 10 is usually a good thing, except when it comes to the Citizens League of Minnesota’s annual property tax review.

The 2008 survey shows Savage’s overall ranking has jumped to fourth highest in the annual comparison of property taxes on average-value homes in 117 metro communities. Last year, the city’s ranking was 18. Cities are ranked on their Effective Tax Rate (ETR). Savage’s rate came in at 1.292 percent, up from 1.194 percent in 2007. The top 10 include: Carver, Victoria, Centerville, Savage, Circle Pines, Lexington, Golden Valley, Farmington, Dayton and Minneapolis.

Other cities in Scott County did not rank as high as Savage in the overall comparison. Prior Lake came in at 29, Shakopee at 71, Jordan at 52, Belle Plaine at 14, Cedar Lake Township at 100, Credit River Township at 101, Elko New Market at 40, New Market Township at 104 and Spring Lake Township at 91.

The Citizens League also did a comparison of homes in 343 Minnesota communities by cluster; where groups of cities were compared by similar characteristics developed by the Minnesota House of Representatives Research Department and the League of Minnesota Cities. These clusters were based on what could be culled from Census data.

Once again, Savage came in fourth highest in the “metro high-growth cities” cluster. The top 10 included: Carver, Victoria, Centerville, Savage, Farmington, Rogers, Chanhassen, Lino Lakes, Champlin and Prior Lake. The only other Scott County city in that cluster was Shakopee, which came in at 22.

Why the increase?

This year, the Citizens League survey includes a profile of each community. Within the profile, there’s a category that breaks down property taxes by each level of government -- that’s where residents can find why the city’s overall ranking has increased.

City taxes actually went down by $6 in 2008 to $1,371 from $1,377 and the rank dropped from third to fourth. But other taxes in the city went up – most notably those paid to the Burnsville-Eagan-Savage School District. That bump of $353 to $1,257 for 2008 from $904 in 2007 is due to the fact that voters approved a $6.5 million operating levy last year.

As well, Scott County’s taxes went up $16 from $881 in 2007 to $897 in 2008 and the special district taxes also went up slightly, from $144 in 2007 to $148.

All of this adds up a $375 increase (11.8 percent) in taxes overall from $3,173 paid in 2007 to $3,548 paid in 2008.

The average home value in Savage in 2008 is $274,670, up 3.3 percent from $265,781 in 2007 and that figure is used in all tax calculations by the League.

City Administrator Barry Stock was shocked by the city’s jump in the tax rank. He also said the generalized nature of the ranking isn’t a true reflection of the city’s conservative budgeting.

“Personally, I don’t like these surveys because they don’t give a complete picture,” he said, “To the average homeowner, it looks like the city is not being responsible, but if you look deeper into the numbers you can see our taxes haven’t changed that much; rather there are increases from other taxing jurisdictions. So it really doesn’t paint a fair picture to group us all into one.”

There is some merit to Stock’s statement, as ISD 191 was in the top 10 in terms of school tax rates. It came in eighth out of 117, which was below the Prior Lake-Savage Area School District, which came in fifth in the ranking.

Even so, when the League compared city tax rates, Savage still came in fourth, just behind Minneapolis, Belle Plaine and Jordan and in front of Hastings, Circle Pines, Norwood Young America, Stillwater, Lexington and Spring Lake Park.

Last year, the city’s tax rate placed it at third highest in the survey. The increase from 2006 to 2007 was due to a 27 percent increase in the debt service levy, which included the debt taken on to build a new police station and renovate city hall and a 16 percent increase in the tax levy which included more funding for public safety and a large contribution to the 800 Mhz system upgrade.

“Every city is different,” Stock concluded, “While we like to compare ourselves to each other, this is not a true apples-to-apples comparison because of our differences.

“And that’s hard for the average citizen to understand because they look at the results and wonder why communities that are so close together – like we are to Prior Lake, Shakopee and Burnsville – can differ so much in one survey.”

  Nancy Huddleston can be reached at editor@savagepacer.com.   

To view the complete survey, go to www.citizensleague.org.