Boom or bust? Billions in Twin Cities property taxes are exempt

- All a person has to do is look up in downtown Minneapolis to understand these are boom times, with a billion dollars in new construction underway for the sixth year in a row—yet property taxes, especially for homeowners, continue to rise.

The reality is, not all property is created equal. 

Carol Becker sits on the little known and poorly attended Board of Estimation and Taxation, which helps determine the property tax levy.  

Moreover, she is no fan of what she considers a kind of corporate welfare. 

"I think that’s wrong, that we are literally taking money out of peoples' pockets to give to an obscenely wealthy person,” said Becker at a recent Board meeting.


What Becker knows all too well, that even politicians cannot comprehend, is just how much property is considered tax exempt. 

The Fox 9 Investigators discovered Minneapolis has $13,930,404,530 in tax-exempt property. That represents 23 percent of the total taxable value of all property in the city, which is $61,356,797,130.

More than $2.3 billion of that tax-exempt property is downtown.  

Some of that real estate is obvious, such as churches, hospitals, non-profits, all kinds of government buildings and, of course, schools of every kind. Property owned by the University of Minnesota alone accounts for $1.9 billion.  

In St. Paul, there is $7 billion in tax-exempt property, much of it in the form of state government property. Again, it is about 23 percent of the total taxable value of all property.  


Becker said there are some properties that are totally exempt, and in the last 20 years the tax burden has quietly shifted.  

In 1996, homeowners paid about 35 percent of the property tax bill. Then came the recession, along with several tax changes. Homeowners now pay 60 percent of the bill.

“We give tax breaks to certain groups," Becker said. "That means everyone has to pay more because they’re not paying."

There is one group that might not be so obvious, and it’s now some of the most valuable property in the city. 

“And the biggest of them are the stadiums because people think a non-profit is supposed to be a church," she said. "No, the football stadium, the baseball stadium, all of those are huge properties that are not paying property taxes.”  

Consider U.S. Bank Stadium, home to the Vikings and operated by the Minnesota Sports Facilities Authority. It cost a billion dollars to build, two-thirds of that financed by the public. However, the public continues to pay, by virtue of the stadium’s tax-exempt status.

At Fox 9's request, Hennepin County crunched the property tax numbers for U.S. Bank Stadium, as if it were taxable. The total tax bill in 2018 would be $37,850,959.  

A Lot of people would get a slice of that: the state ($8.7 million), county ($5.8 million), city ($8.3 million) and Minneapolis schools ($4.6 million).

The $4.6 million for Minneapolis schools sheds a different light on that Super Bowl photo opportunity when NFL Commissioner Roger Goodell got a standing ovation for giving a middle school a check for $220,000. 

That’s pocket change compared to what schools could be getting if the stadium was on the tax rolls. 

However, as Becker said, it requires thinking about taxes a little differently--a concept known as tax expenditures. 

“One of the things people don’t understand are tax expenditures," Becker said. "Tax expenditures are when we choose not to collect taxes from a certain group. So people think of it as a tax break ... It's not money coming in, so it's as good as spending it.”


The Minnesota Revenue Department publishes a 200-page book of tax expenditures, listing every tax break, giveaway and free ride.

There is no tax on farm machinery ($61.5 million), horses ($1.7 million), television commercials ($1.2 million) or lawmaker’s per diem allowance ($100,000), and no sales tax on stadium suites ($3.3 million) or Super Bowl tickets ($9 million).  

In fact, the total loss statewide from tax-exempt property can be found here too, nearly a billion dollars ($935 million) a year. 

Another big chunk, $235 million, is diverted from government coffers by something known as tax increment financing--the policy which allows a project to be paid for by capturing its property taxes. It's how the City of Minneapolis paid for and continues to pay for the Target Center, home of the Timberwolves.    

Which brings us back to Becker and the tax board, where they recently voted to refinance $74 million in Target Center debt from short to long terms loans. Becker wanted to renegotiate with Wolves owner, Glen Taylor.

“Glen Taylor is worth $2.6 billion, I looked it up," she said. "The Timberwolves have gone up hundreds of millions of dollars, in large part because we have built a palace for them."

But the Mayor said a deal, even a bad one, is still a deal. 

“I do believe the city maintains its full faith and credit," said Frey. "The city says we’re going to do something, we should do it. So, I’ll be voting in favor of this.”

Becker was the voice in the wilderness.

“I can’t see myself voting for this ethically or morally," she said in the meeting. "This is not how our world should be. And I’ll be voting no."


The FOX 9 Investigators contacted other cities to see how they compared to Minneapolis and St. Paul with 23 percent of the market value considered tax exempt.  In Seattle, there is $38 billion in tax exempt property, about 17 percent of the total market value. In Denver, there is $19.4 billion in tax exempt property, about 13 percent of the total market value.  

But in Pittsburgh, a city with several universities and hospitals, there is $11 billion in tax exempt property that represents 36 percent of the total market value. 

Up Next:

  • Popular

  • Recent

Stories you may be interested in – includes advertiser stories