It’s time for the next Minnesota Miracle

Dakota County: lowest county taxes in the metro – still not enough to offset the problem
Let’s start with what’s not driving most of the pain.

Dakota County continues to have the lowest county property taxes in the entire Twin Cities metro area and the lowest per-capita county property taxes of all 87 Minnesota counties.
For a median-valued Dakota County home in 2026:

• Dakota County portion: $783
• Metro average: $1,210
• Ramsey County: $1,896
  Even with rising costs, Dakota County’s portion of the tax bill – usually around 20 to 25 percent – remains low. Our AAA bond rating and resident satisfaction remain strong.
  But here’s the problem: the county portion is the smallest slice of your bill.

Cities and schools: 75-80% of the bill – and facing enormous pressure
For most homeowners, 75-80% of their property tax bill comes from city and school district levies. And the 2026 increases hit older communities especially hard. West St. Paul homeowners are seeing double-digit increases, about 10% on average. In South St. Paul, the increase is nearly 9%.

School districts face the same pressures. Every Dakota County school district now relies on a voter-approved operating referendum just to maintain basic services. In 2025 alone, five school districts passed new referenda to cover increasing needs: mental health support, special education costs, staffing pressures and inflation.

But the cost of those referenda is far from equal. Districts with a strong tax base – large retail corridors, corporate campuses and expanding commercial development – can spread those costs widely. Districts with older housing stock and a limited commercial base, like South St. Paul, must lean heavily on homeowners.

The result: two households can approve the same levy and pay vastly different amounts simply because of their ZIP code. That inequity is built into Minnesota’s property tax system and it is getting worse.

Mandates pushing local levies higher
Cities and schools aren’t alone. Counties across Minnesota are facing major new burdens from state and federal government, many of them outside local control.

Dakota County is required by law to provide 116 state-mandated services, including child protection, mental health, economic assistance, elections and public health. The state decides what must be delivered but only provides a fraction of the funding to deliver it.

Two major pressures hit Dakota County for 2026:

• $5 million in new state mandates, including important but costly requirements for the African American Child Welfare and Disproportionality Act.
• $21 million in federal funding cuts and cost shifts over the next two years, particularly in SNAP and Medicaid reimbursement.
  Because these are legal mandates, the county must provide the service even when the state or federal government reduces funding.

To balance our 2026 budget, Dakota County cut $8.4 million, largely by leaving nearly 50 positions unfilled – many in Community Services. Those positions support children and seniors in need, adults with disabilities and struggling families. These are not easy cuts. They are painful and real.

Even after making them, the county levy still had to increase simply to comply with required services.
This is the core problem: the State keeps adding or expanding mandates while relying on local property taxes – the most regressive tax we have – to fund them.

Outdated state technology makes costs worse
One of the most frustrating cost-drivers is state-required technology. For financial assistance programs, county workers still must use what staff wearily call the “green screen of death,” a 1990s-era state computer system that forces them to re-enter the same client data repeatedly. It is slow, inefficient and expensive. And local taxpayers are stuck paying for the wasted time.
If the state gives us mandates, it should also give counties the ability to modernize how we deliver those services. We are closest to the people we serve – we know what works. The state recently offered flexibility in a couple of areas, and the results have been impressive. Expanding that flexibility would allow us to deliver better service at lower cost.

Minnesota fixed this once before
Minnesota has been here before. In the late 1960s, unsustainable property tax increases pushed families to the brink. The Legislature responded with the bipartisan Minnesota Miracle of 1971, shifting a significant portion of school funding from local property taxes to the more progressive state income tax. It was bold, fair and transformational. Today’s situation requires a modern version of that courage.

What a new Minnesota Miracle could look like
I checked to see what other states and countries are already doing to modernize failing property tax systems. The State of Minnesota should immediately conduct their own review and incorporate the best ideas for our unique needs. Below are what others are trying:

• Restructuring property taxes so higher-value homes or investment properties pay a fairer share
• Greater state partnership in school funding and human services
• Circuit breaker protections to help seniors and long-term homeowners stay in their houses
• State support for aging infrastructure in older communities
• Modernized technology for counties instead of outdated state systems
• Flexibility for local governments to innovate and find the most cost-effective service models.

The bottom line
Local governments are doing their part. Dakota County remains the lowest-tax county in the metro and among the lowest in the state. Cities, counties and schools are doing everything they can to maintain the services families rely on.
But the system itself is broken. Property taxes are regressive, inequitable and increasingly unsustainable especially for older communities like West St. Paul and South St. Paul. Minnesota solved this problem once before. It’s time for the next Minnesota Miracle.

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