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Winona tax base falls again (03/20/2013)
By Chris Rogers

The city of Winona's total tax base fell 1.4 percent, from $17.1 million to $16.8 million, between 2012 and 2013, Winona County Assessor Steve Hacken told City Council members on Monday. In 2012, the city's tax base fell by nine percent. The total decrease in tax base for the past two years comes in at $1.9 million.

Much of that 2012 decrease was a result of changes in state tax law, which expanded tax protections for the owners of lower-value homes. While that law gave a greater tax break to lower-end homeowners, things are not exactly good for them.

The market values of residential properties in the city dipped by $35.5 million between 2012 and 2013. Most of that decrease is in the lower-end housing market, according to Hacken. The number of sales has risen, "but the prices just haven't been warming up much yet," especially for houses under $100,000, Hacken explained. Hacken says his measure of market values for those houses will drop even more for 2013. Foreclosures that have depressed values are a big part of what has plagued Winona's low-end housing market, Hacken said.

There were positive developments that helped to balance some of the bad news for residential homeowners. Apartment values rose by three percent and new construction expenditures more than doubled from last year, though they are still a fraction of construction figures from before the 2008 financial crisis.

Eight million dollars of the $11 million in new construction spending this year is due to four properties, Hacken told the council, and all of those properties were residential developments. "We assessors sit around and talk, and we figure one growing market is senior housing," he said.

Commercial and industrial property values leveled out somewhat, dropping by only .01 percent and 1 percent, respectively, compared to 4 percent and 5.3 percent dips last year, respectively. That is good news for the city, since industrial and commercial properties pay more in property taxes per dollar of market value than other types of properties. Additional industrial properties are expected to come on the city's tax roll when state JOBZ tax breaks for Wenonah Canoe and Hal Leonard Music Publishing expire in 2015, Hacken said.

"We are pretty well off as far as what other communities have seen," Hacken told the council. Cities in Western and Northern Minnesota are seeing big losses in populations and tax bases, he said.

The council generally agreed the situation is not too bad, all things considered. Council member Paul Double echoed that sentiment, but said, "I hate to see it moving to senior housing. I am worried that is an indicator of things to come. I would rather see lots of young families buying houses." Seniors buy less food and clothing and do not send kids to the school system, Double explained. He also warned that as communities in Western and Northern Minnesota get desperate to restore their tax base, to save their schools perhaps, they might compete with Winona for hosting new and expanding businesses.



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