So this is a public road owned by the city? Not a road in a private community that has to be maintained by the residents?
I thought that was what taxes were for ... to maintain public infrastructure.

No, this is a little town of 1600 people; smack in the middle of town, not a private community in any sense. I also thought that is what taxes were for.

I'm not sure what you're looking for. It is what it is.

If you're looking for more info, why not contact the town's Public Works department.

Only looking for some information about how other municipalities do road repair financing. I've lived in one town for 50 years and we don't do it by "personal" assessments. Just curious.

What SnidelyWhiplash said. Call your town.

The OP made it very clear. She is just looking for reactions from others who have had similar experiences: "Reactions? Is this kind of repair funding done anywhere else?"

If you ask me, and I am going to pretend you did, this is a bit of a perversion of a special assessment tax. Taxes like this are fairly common, although handing you a bill is not something I have seen before, they usually just assess a special property tax that you pay over a period of many years. These types of taxes are usually approved when the expenditures are particularly beneficial to a limited area of the community. The most common examples I can think of are park improvement funds, police and fire expansion funds, school construction funds, and (most relevant) things like city water tie in.

I have never heard of residents being taxed for a street improvement fund unless the improvement was specifically designed to help those residents. In other words a main street through a development was widened to ease traffic for the development. But if the street were a thoroughfare to other areas, then most communities would not do a special assessment tax. I am betting your city council is trying to pull a fast one and you should look at your options. Your state should have rules for special assessments for roadways and repairs that your city must follow in order to receive state funding for roads.

To answer your question the city I am building in, recently decided to build in city water to a new development. Each resident is required to pay $150 per month extra on their water bill for the next few years. The sad thing is, the development was fairly new and all of the septic systems are less than 10 years old, some less than 2 years old.

state laws can vary. Not all streets are "owned" by a municipality, contrary to what you may believe. There can be private roads which the town is not obligated to repair at all.

I think street improvements are usually passed through as taxes or bonds, not an outright bill. I think that's a pretty large and unusual assessment. I'd certainly find out more about what is going on. You mention a "municipality" -- the bill is from them? Was there a city council action approving this? a notice to the homeowners, a hearing, or a protest option? It may not do you much good in the long run, but if they cut procedural corners, you might be able to get them to back off.

Hi, violet. It is a city street; I received notice of the assessment and it invited comments before the council meeting. Because I don't live in the town, I don't know what happened at the meeting last night, but I did send the town administrator a polite comment with all my reasons for believing this was a highly unusual way to fund street repairs. There is, also, some sort of appeal to the county after the passage of the assessment by the City Council. I won't appeal it if it has passed--little town, don't want to make big waves.

When I lived in Northwest Jersey our town installed a sewer line in our community and we were assessed per foot of road frontage. It was our first house and we had a tiny, tiny lot with only 60 feet of frontage. But the guy up the road had a corner lot and he had to pay for frontage on both roads. 60 Feet in front, and 125 feet down the side.

What I would do is research how road repairs are generally funded in that town. What exactly are the "repairs" and how much frontage do you have on that road?

The sewer line makes sense because I think most people would agree that it is a benefit and it teally only benefits the people who are getting sewers.

I have never seen it used for public road repair. I have seen a special assessment for public road expansion. We currently have an expansion going near our home and it is funded by tax payers in a wide area around it.

Small city councils regularly do things they are not legally allowed to do. To them it may seem perfectly reasonable. If you don't want to make waves in town then call your state board of transportation, they probably have a liason with local boards who can inform you and the council of what your state allows. Most states exercise control over community roads by controlling the state funded road budget. Just as the Federal government does with the states.

In our town (well, the town I just left) it goes like this:

Routine maintenance - paid for with city/county taxes. This includes things like chip-and-seal, patching, etc. Repaving (asphalt in a northern climate) is considered routine.

Non routine maintenance - assessment. They take the total cost and simply divide among the property owners who's property lines front the road. This includes things like digging up and repouring the gutters, widening the lanes, adding sidewalks, reconfiguring traffic patterns (round-a-bouts etc).

Widening the road - city/county/state taxes depending on who drives on the road going from where to where. This includes adding traffic lanes or (less frequently) changing the route from a city street to a county road, or a county road to a state highway.

Alas, it sounds like your town and mine are similar. Bite the bullet....

I live in a state where less than half the roads are paved. The main roads are paved but side roads, connector roads, subdivisions, etc are not. My town has 850 people. A few years ago at Town Meeting the road dept wanted $20,000 to repave a half mile of road. One resident stood up and said "Didn't we just pave that road 10 years ago?" Yes, but with frost heaves, and patches the road is in disrepair. "So we're spending $2,000 a year to maintain a half mile of road? That's nuts!"

We voted down the request and told them to tear up the existing pavement and return it back to a dirt road.

In the Minneapolis suburban area it's common to get street assessments. We just got a letter a few weeks ago: $2500 for redoing the asphalt street and adding a curb in front of a residential 100x100 ft lot. We have the option of paying it all at once or spread out over eight years at 5.25% interest. We also pay property taxes around 1.5% of the value of the home per year- some of which goes towards routine street maintenace, some towards schools, etc.

This second house is in northern Minnesota...must be a Minnesota thing.......

I've driven through many states for my job as sales manager, and I remember driving through an eastern state in gridlock. We slowly passed a sign that said, "Your tax dollars at work." Yep they were working on that road. I guess some states include it in taxes, but not all.

My brother, who lives in a neighboring town, just told me another wrinkle: that sometimes a municipality might get a grant to do repairs. If that is the case, residents of the area in which the repairs are being done with grant money don't get assessed. Boy, that sounds equitable....

Yeah, in our town one of the churches tried to get out of paying an assessment. They claimed they only used the road on Sunday and so didn't need to pay because nobody else used it on Sunday so the road didn't need another lane for them.

...

Then they claimed they didn't need to pay because they were a church.

Just pay the gd assessment already.

I hope you weren't speaking to me .......

=)

While reading about the different states, we must remember we live in a nation that has 50 individual states with 50 individual Constitutions and 50 individual sets of laws regarding this topic. So what's happening in Minnesota may not be allowed in say, Kentucky.

Like Vermont where everything is voted on at Town Meeting from the school budget to the town budget to whether or not we should put money aside for a new school bus, to Pennsylvania where the voters have zero say in any of these matters.

So something about this did not sit well with me, so I looked it up.

From the Minnesota House of Representatives: here

Determining the
Amount of the Special Assessment

The assessment amount charged to
the property cannot exceed the amount by which the property benefits from the
improvement, as measured by the increase in the market value of the land due to
the improvement. The assessment must be uniformly applied to the same class of
property. A local improvement may benefit properties that are not abutting the
improvement and those benefited properties also may be assessed.

In order for a special assessment
to be valid:

• the land must
  receive a special benefit from the improvement being constructed,
• the assessment
  must be uniform upon the same class of property, and
• the assessment may
  not exceed the special benefit. Special benefit is measured by the increase in
  the market value of the land owing to the improvement.

A special assessment that does not
meet these requirements is an unconstitutional taking.

The benefit is measured by the
difference between what a willing buyer would pay a willing seller for the
property before and after the improvement, based on the highest and best use of
the land.

Road repairs are not mentioned as allowable, only road improvements, and I would think even if repairs were allowed they would not meet the higher FMV requirement. You can read the whole thing at the link, I didn't want to repost something that is available for free. I am not an expert and not claiming the search I did was exhaustive, just a starting point.

Bry911: Thank you so much! I will be there for a week , in a week. I would like to just mention this information to the council as a learning tool--I'm not sure it will benefit me now, without raising lots of hackles. but for the future....

" I am not an expert". Agreed.

While not a local tax guru, I had enough exposure to it to explain how what you think you found isn't what you think it is.

This information release descibes what a special assessment is, what it isn't, and a bit more about how they work. Special assessments are a special type of "non-tax" tax collected by governments. Often used when a local government acts as an agent for the common good of some group, to coordinate improvements or other action that arguably benefits the finite group. In the role of agent, the local agency specs the work to be done, collects money to pay for it, and then either contracts it out or does the work itself, disbursing the collected money to pay for it. Special assessments are generally not considered to be taxes.

If those assessed to pay for the work didn't benefit, or if the charges were unfairly imposed, or if the charge exceeded the value of the benefit (the verbiage in your bullet points), then payers would have grounds to sue the governmental agency managing the assessment for damages. BY DEFINITION in the statute, none of these are the case, so these grounds for damage suits are taken off the table.

What's so important about it not being done by taxes? Most jurisdictions have stringent rules about what needs to be done to impose or increase a tax, often enhanced or super majority votes. Politicians avoid voting for taxes, doing so can be political suicide. So this special category was invented. Using this vehicle usually doesn't require votes and passage by politicians, and governments get money they want to do things they want to do.

Snidely I am sorry that you got all butthurt about a different thread but seriously stop being a tool.

A special assessment is not just a non-tax tax...It is an assessment against real property for the recovery of expenditures for properties that receive a direct benefit. Some states are looser in their interpretation of direct benefit but Minnesota is pretty stringent. The document is exactly what I thought it was. A description of special assessment powers granted to local governments by the state and links to the enumerated powers of local governments.

Again, read the links in the document see the enumerated powers of local governments and then come back and tell me what it is I don't understand. I didn't just look it up and attach it, I hopped on Westlaw and looked. Then provided him with a place to start. It is exactly what I thought it was, a place for him to start his information search...

Ha, well you have an annoying pseudo-expert air.

Special assessment rules are pretty similar from place to place, and how they're used is also pretty similar from place to place. I have the knowledge of training and experience, you have Google.

And I can read too! I am almost a superhero or something with such rare skills...

Vedazu - Generally speaking councils get a lot of leeway with special assessments as there is a presumption that the work they do (which can be as simple as hiring an appraiser) is correct. Which kind of doubly screws you because immediately after the project they are going to increase your property value by that much on the tax rolls. If you don't want to pay, then you have to prove they are wrong.

If you were in a large city, I would tell you that this was a waste of your time, as a large city will have actually hired an appraiser gotten the bids and all of that. However, small towns often skip a few steps. While I don't have specific experience in your town or, in fact, in Minnesota at all, I do have an unfortunate amount of experience with small town city councils. Including special assessment taxes. While I am not the expert that Snidely seems to be, I can tell you unequivocally that there is no mechanism in your state for using a special assessment for repair, however, there is precedent and when tested those cases are regularly found in favor of the taxpayer.

bry11: thank you so much for the information. Ironically, the houses in this town are valued at a very low level. I bought it for $75000 (it would be worth upwards of $250,000 in NJ) and my property taxes are $1700 a year. That's why the $7500 assessment, in that context, is such a big amount. I appreciate your comments and I'll ruminate on it a bit. My NJ property taxes are 14K a year....if I got an assessment for 56K for road repairs I'd be in the poorhouse, or dead from a heart attack.

"I can tell you unequivocally that there is no mechanism in your state for using a special assessment for repair,"

Another pseudo expert exclamation. Someone who's as unfamiliar with the topic as you are, and who doesn't practice this subject matter in this particular state, shouldn't speculate and say that that his/her speculation is unequivocal.

On the same topic, what is a repair? Compared to, what is an improvement?. Municipal law and finance exist in their own worlds, so I'm not asking about accounting definitions. Again, by definition, if a particular project were to be viewed as a repair in a municipal finance sense, a special assessment wouldn't be used. And, if one is used, then the work BY DEFINITION and by statute doesn't constitute a repair.

Any appraisal work is perfunctory, done after the project kicks off, not before. It's done as an element of compliance with statutory requirements.

PS - you've again used the phrase "Special assessment taxes". They're not taxes, as I explained. I'm sorry you're being so obstinate.

First, Tax (noun) - a sum of money demanded by a government for its support or for specific facilities or services, levied upon incomes, property, sales, etc.

Special assessments are taxes stop trying to argue semantics especially when you are wrong.

My area of expertise is utility companies (in fact my specific area of expertise is coal fired power plants.) I have stood in front of half of the city councils in the TVA and talked about special assessments for utility infrastructure. I have written three peer reviewed articles on the subject. I have testified in half a dozen cases, and in case you are wondering I am the bad guy who defends rate increases for utility companies. When I said I was not an expert, I really only meant on roads. Now to be fair, I have never had any involvement in an a flat fee assessment and I didn't think any place used them anymore. There are parts of this I just don't know about. Flat fee seems crazy to me. It just seems they are begging to have significant amounts of bad debt.

If you had read the supplied document and clicked on a link you would have realized that Minnesota sets specific guidelines on what is and is not considered an improvement rather than repair. Additionally, just like most other states (read: every state I have heard of) requires the study and included increase in FMV of properties to be performed prior to approving the assessment. In fact, it is never compliance, as the window for protesting the assessed FMV addition to property closes prior to the performance of work. One crappy thing about assessments is that you have a specific time period to file an objection or you will be deemed as having accepted it. Once you have been deemed to accept it, then you accept the risk that your property value will not be increased by the given amount.

In conclusion, Snidely, I am so sorry that you keep trying to fight me on the areas that I have specific expertise in. You have pretty much hit the trifecta. It is just dumb luck. I am sure you are a brilliant guy, but if you will accept a small piece of advice from me, stop trying to prove other people are inferior to you and just worry about the things you are saying and doing.

Individuals who itemize can deduct taxes (except for federal income and soc security) they pay. Special assessments aren't deductible.

Given a chance, I go for the low hanging fruit.

Too bad you are soo short that you just can't reach it...

From IRS 530: You can, however, deduct assessments (or taxes) for local benefits if they are for maintenance, repair, or interest charges related to those benefits.

Many kinds of taxes are not deductible, for example tarrifs on imported goods which the US identifies in treaties as "taxes" are not deductible. Special assessments are handled as an increase in basis, and are handled the way all other improvements are, at the sale. To use what is deductible on your annual taxes as the only definition of tax is laughable. Sin taxes are not deductible, gas taxes are not deductible, hotel taxes are not deductible, phone and utility taxes are not deductible, the list goes on... Are none of those things taxes? Funny how out of the hundreds of non deductible taxes, that you picked the one that actually can sometimes be deducted. In fact, there are more nondeductible taxes (in number) than otherwise.

Edit: Let me take a moment to apologize to everyone reading this thread, I have a very hard time letting veiled personal attacks and, questions as to the validity of statements slide by undefended. Yet I know every response takes the thread further from helpful. Vedazu, I just want to reassure you that if you have any specific questions, I will be happy to try to help you. Minnesota has put out quite a few documents related to this, so there is plenty to read.

In that same IRS publication you quote, the paragraph before what you chose says:

"You cannot deduct amounts you pay for local benefits that tend to increase the value of your property." This is one of the requirements/definitions of a special assessment, as per your own cite.

We wouldn't allow even our brand new staff accountants to use IRS pubs for research. Armed with your Google searcher, that's all you have. You've demonstrated how easy it is to come to the wrong conclusion, when someone who doesn't understand what they're reading thinks they've found an answer with words that match (but are in reality taken out of context).

I'm done.

What context? It's a tax! It meets every single international definition of a tax and can sometimes even meet the stupid arbitrary one you made up. I was not trying to say it was deductible, that was your completely uninformed requirement! I was saying that even the IRS calls it a tax. My own cite didn't say this was required for a special assessment, my own cite said it was a requirement for a special assessment in Minnesota! (To be fair I think most states agree with Minnesota.)

I love the way you ignored all the other taxes that I gave that you swear aren't taxes.

You were done before you started! You are trying so hard to prove me wrong, that you are attempting to bury the whole thread in semantic minutiae. Seriously, we have had: what is a tax? What is a special assessment? What is a repair? What is an improvement? How good is an IRS publication? What are damages?

You are so busy trying to prove me wrong that you never bothered to be right. Don't get me wrong, I am loving it. Hell, at this point the entire office is loving it, we have a researcher whose pet project is historical property taxes, and I thought that she was going to burst a blood vessel.

Edit: I think some of them are rooting for you. Don't quit now.

Edit2: Let me leave you with this one final picture: On a cold night in December of 1773, Samuel Adams led the Son's of Liberty aboard three British ships in Boston harbor to dispatch 342 chests of tea into the harbor. Shouting at the top of their lungs, "No tariffs or levies without representation, please don't call it taxation, as the tariff on tea is not deductible from income tax, which is still well over a hundred years away, but even then it will not be deductible, so it will still not be a tax!"

Oh, guys, don't kill each other over this! I just got an email from the City Administrator telling me they have already started the project and my water's going to be off for a couple of days. So, they passed in on Tuesday night, and probably started working on Wednesday last week!

Sometimes government is efficient!

I would like to just mention this information to the council as a learning tool--I'm not sure it will benefit me now, without raising lots of hackles. but for the future....

There is a publication by the League of Minnesota Cities that you might want to refer them to. The publication can be found at Special Assessment Guide.