REGIONAL— Like many St. Louis County property owners, Sue Larson recently opened her truth-in-taxation statement for next year’s property taxes. The statements haven’t been bringing good news, with most units of government instituting hefty, proposed increases in their 2026 levies.
But the news for Larson was particularly disturbing. Her statement showed her taxes on her small, rustic island cabin on Lake Vermilion would increase by $903, a whopping 36.5-percent increase over last year’s tax bill of $2,471.
It turns out Larson wasn’t alone. Her neighbors, Mike and Lori Ptak, have seen their proposed property tax for their nearby water access cabin jump by $1,777 for next year, from $3,589 to $5,366. Mike Ptak said he understands the need for taxes and doesn’t mind paying his fair share but questioned what amounts to a 49.5 percent increase in just one year. He said there were no improvements that could have accounted for the increase, although county records show the completion of an eight-by-three-foot woodshed in 2024, which would likely make little difference in the property’s overall valuation.
The hefty tax increases are the result of a combination of factors, including sharp increases in property valuations on some lake parcels along with heftier-than-usual increases in 2026 tax levies by both Greenwood Township and St. Louis County.
For Larson, the county portion of her tax statement jumped a whopping $625, or 34 percent, to a total of $2,441. Her township levy went from $111 last year to $249 in 2026, a percentage increase of 124 percent. A relatively modest increase in her school tax made up the difference.
For the Ptaks, the county portion of their tax bill is slated to jump from $2,598 in 2025, to $3,760 next year. Their township portion will jump from $159 to $383.
Those increases were fueled by the county board’s decision to adopt a proposed 2026 levy increase of 12.4 percent. The county board could still opt to reduce that increase when it sets its final 2026 tax levy later this month, which could potentially drop tax bills modestly.
At the same time, Greenwood residents voted at their annual meeting last March to double their tax levy to $600,000 to cover some significant potential costs associated with roof maintenance on the town hall and the possible replacement of a fire engine.
These levy increases, it turns out, were part of a pattern around the state as local units of government responded to rising prices, particularly for health care benefits, staff salary increases, as well as funding cuts from Washington. According to the state Dept. of Revenue, local governments around the state instituted an average proposed property tax increase of 6.9 percent for next year, while the average city boosted taxes by 8.7 percent.
While historically high, those average increases statewide pale in comparison to some of the tax hikes seen here in the North Country. St. Louis County’s 12.4 percent proposed levy increase, for example, was the fifth highest of any of Minnesota’s 87 counties. Greenwood’s 100-percent levy increase was one of the top ten largest levy increases of any of the nearly 2,000 townships in the state.
Valuation increases another factor
For residents of the eastern half of Lake Vermilion, the pain was exacerbated by both rising property values in general, along with this year’s reappraisals in Greenwood and Breitung townships, as well as Eagles Nest.
According to the St. Louis County Assessor’s annual report, 77 percent of the properties reappraised in Greenwood saw increases, with an average value increase of 14 percent. A total of 79 percent of Breitung properties saw increases, with an average value increase of 18 percent. Eagles Nest was an exception to the rule, as 52 percent of its properties saw a valuation decrease and those with increases averaged just a one percent hike.
Averages don’t tell the story for everyone, of course. The Ptaks saw their cabin’s assessed value jump from $436,200 to $580,100 for next year, a whopping 33 percent increase. Larson, meanwhile, saw her valuation jump from $310,600 to $380,500, a 22.5 percent increase.
Valuation increases don’t always translate into higher taxes, since property values only determine the piece of the overall tax pie each property owner pays.
Indeed, both Larson and the Ptaks have seen their valuations increase steadily in recent years. As recently as 2021, the Ptaks’ property was valued at $295,100. In just four years, the property valuation has essentially doubled without any significant improvements. Larson’s has gone from $226,500 to $380,500 during the same period. That’s for a modest island cabin without a well or a septic system.
Despite those increases, Larson had seen her property taxes decline modestly for the past three years in a row, while the Ptaks’ tax bill had been relatively stable. Now, however, with sharp increases in tax levies, combined with rising property valuations generally and this year’s reappraisal in their township, their tax bills have spiked like never before.
Reflecting the market?
While property owners often complain that their assessed values are too high, two local real estate brokers contacted by the Timberjay, say the increases they’ve seen this year are reflective of a real estate market that has fewer sellers than usual and many buyers who are flush with cash.
“We’re seeing cash sales in the millions of dollars,” said Steve Abrahamson, real estate broker with Vermilion Land Office. “There’s not much that’s affordable for a local person anymore,” he said.
Julia Maki, a broker for BIC Realty, said real estate prices have essentially doubled since the COVID pandemic. “Starter cabins before COVID were in the $300,000 range,” she said. “Now, you’re looking at as much as the $500,000-$600,000 range.”
Abrahamson, who sits on the county’s board of appeal and equalization, which hears complaints about property valuations, said the cases that have come before the board have been largely in line with what he’s seeing in the real estate market.
“The county is really just catching up in my opinion,” said Abrahamson. He said water access properties are probably seeing the biggest jumps in terms of valuation, in part because he believes they had been undervalued by the county in recent years.
Abrahamson said the current market reminds him of the price run-ups the area experienced in 2004-2005. Those values, particularly on lakeshore, came back down fairly sharply due to the 2008 financial crisis and have only recently surpassed those previous peaks.
County officials note there’s little they can do to address the concerns of taxpayers whose property values are rising. State law requires that assessments be within 90-105 percent of a property’s actual market value— and state revenue officials oversee compliance with that requirement. If counties fail to abide by the law, the state can impose across-the-board valuation increases to bring areas into compliance.
Hope for the future?
If there’s one thing that can be said about property taxes, it is that they tend to rise and fall. As St. Louis County’s overall valuation increases, the share of the overall tax bill that any property owner can expect to pay will tend to decrease, assuming that levies don’t increase faster than the county’s overall valuation.
St. Louis County’s overall valuation has been increasing at a rapid pace, although not as robustly as seen with many lake properties. Since 2020, the county’s total valuation has jumped from $18.45 billion to $28.4 billion, a 54-percent increase over five years. Of that, new construction accounts for $305.7 million, or about 30 percent of the overall valuation increase.
In addition, while Greenwood and Breitung were reappraised this year, which affected thousands of Lake Vermilion property owners, other parts of the county will be subject to reappraisal over the next few years. Assuming those valuations also rise, which local real estate brokers believe is likely, those hit with hefty tax increases this year, could well see those tax bills moderate next year.