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Despite more state aid, local governments pointed toward property tax hikes

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Many of Minnesota's local governments are poised to raise property tax levies in 2014, in spite of changes at the Legislature designed to bring those taxes down.

As the Pioneer Press reports, state revenue officials say the preliminary levies set by cities, counties, and other tax districts for next year total $153 million more than this year. The numbers can still change - in fact, Revenue Commissioner Myron Frans tells the newspaper the preliminary figures "always come down" before they are finalized.

MPR reports local governments set the early numbers in September. The public has time to respond before the levies are finalized by December 27. The Revenue Department plans to issue a summary report in February.

An increase in property taxes would be somewhat surprising, since the tax bill lawmakers passed last spring was intended to bring them down. The Star Tribune reports the Legislature increased state aid and eliminated the sales tax on purchases by cities and counties. State officials estimated this summer the changes would lead to a $121 million reduction in property taxes. Frans tells the paper "Some cities and counties are really trying to return some of this money for property tax (breaks) and some are fixing potholes and other things."

Sen. Julianne Ortman, the lead Republican on the tax committee, tells the Associated Press the preliminary levies demonstrate that increasing state aid does not necessarily translate into lower property taxes.

State officials also issued a separate report Tuesday showing that overall tax revenue in October exceeded projections by 3.6 percent, Finance & Commerce says. The gains resulted from higher income tax revenue, while corporate and sales taxes were in line with expectations.

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