How much will Rochester tax increases cost you?

ROCHESTER — With Election Day less than three weeks away, Rochester voters who are mindful of their tax bills may have a question on their mind.

That is: How much would a proposed $19.4 million annual operating levy — on the ballot — for the Rochester Public Schools cost me? And how much will a host of proposed property tax increases — not on the ballot — also cost me?

Preliminary tax increases on the table include a near 10% increase for the city, a 5.57% increase for Olmsted County, and 3.6% for RPS under its regular levy.

The sum of those numbers might lead some to believe they'll automatically face an 18% bump when their tax bills arrive, but that's not how math — or property taxes — work.

The preliminary levies — the maximum property taxes the three bodies can collect next year without a referendum — would increase total taxes collected by $20.3 million, which represents an overall 6.6% increase in the combined collections this year. (The three local government bodies will all finalize their 2025 tax levies in December of this year.)

Of course, the taxes are spread across different footprints, but Rochester property owners pay into each levy.

How much of the $20.3 million increase each property owner might pay will vary, and actual estimates aren't expected to be calculated and sent to property owners until mid-November.

Olmsted County Assessor Julie Hackman said the notices that include all taxing entities are on schedule, with local tax rates still being received.

Calculating individual impacts starts with determining the tax capacity of properties in each taxing entity. The capacity is determined by applying a state-mandated rate to each property's taxable value, which is provided to a property owner in a notice sent each spring.

Current taxable property values can also be found online, by searching for an address at

For homesteaded residential properties, the Minnesota Department of Revenue has set a 1% class rate for the first $500,000 in home value, meaning a home with a $250,000 taxable value will carry a net tax capacity of $2,500.

The property tax burden is higher for homes valued at more than $500,000. Property tax rates are also higher for commercial and industrial properties.

The next step involves comparing the overall capacities in each taxing district to the levies required for each 2025 budget. Dividing the anticipated levy by the overall tax capacity provides the local tax rate.

For the city of Rochester, the combined anticipated total tax capacity is $224.9 million, which will be divided by the $111.6 million levy to produce a 49.6% city tax rate. That's higher than last year's 47.8%, but down from a 14-year peak of 52.7% in 2019.

Looking at random properties throughout the city, the increases vary based on property values, with some homes seeing city taxes increase by nearly 20% following property value adjustments and others looking at potential tax reductions.

For instance, a $265,500 home in the Country Club Manor neighborhood has a taxable value of $242,845, due to the homestead exclusion. It gives the property a net tax capacity of $2,428, which points to a $1,205 basic city tax, which would be a $46 increase from this year. Again, this is just the city tax portion of the tax bill.

In southeast Rochester, a $152,600 home near Slatterly Park carries a taxable value of $119,784. With a net tax capacity of $1,198, the potential city tax is $595, a $23 decrease from the current year.

Remember, the calculations are more complicated for homes valued at more than $500,000, since a 1.25% tax rate kicks in for any value above that point. Additionally, a homestead exclusion is not available for homes valued at more than $517,200.

Because of that, a $616,500 home near Century High School has a net tax capacity of $7,018 and can anticipate paying approximately $3,500 in city taxes next year, a $560 increase compared to 2024 proposed taxes.

Since a variety of factors, including special assessments, can factor into a property's overall tax bill, having an individual tax rate only goes so far in helping calculate anticipated 2025 taxes.

However, since Rochester's proposed tax levy increase is the largest within the city and sits in the smallest footprint, it will provide a glimpse of what could be expected when property tax estimates arrive in mid-November.

Those tax estimates will not include the operating levy proposed in the Rochester Public Schools referendum, which seeks to collect about $19.4 million per year for 10 years. The operating levy would add nearly $350 to the tax bill of a $350,000 home.

If the levy proposal passes and is added to the other local tax levies, the total of the city, county and school district would be a nearly 13% increase.

The impacts to individual property owners will continue to vary.

It's too early to say what the impacts will be for individual property owners, but a look back to the implementation of the last referendum, which resulted in a nearly $10 million tax levy increase for the district, suggests some answers.

Looking at a dozen random homes, their 2020 tax bills saw overall increases that ranged from $106 to $382.

The majority of increases remained under 6% while the district's 17.75% levy increase contributed to an overall 7.9% increase in property taxes by the city, county and school district.