Cities begin approving preliminary budgets


The Inver Grove Heights City Council opted to go with a higher preliminary tax rate of 6.25 percent to give itself wiggle room while reworking the city budget before it gives final approval to it in December. graphic courtesy City of Inver Grove Heights

With the preliminary tax levy in place, taxes on a mean-valued home in South St. Paul would go up $87 for next year, though the city’s staff and council said they’re working to cut that number down before the final budget is approved in December. graphic courtesy City of South St. Paul

South St. Paul and Inver Grove Heights both set increase cap

 

Budget season has hit the South-West coverage area, and two cities have set their preliminary budgets and levies.

The preliminary numbers set the cap for what will be approved in December. Levies can decrease from what is currently proposed, but they cannot increase.

 

Inver Grove Heights

At the Sept. 10 Inver Grove Heights City Council meeting, Finance Director Kristi Smith said taxable market home values are up in the city by 7.4 percent. 

For 2019, the base budget, plus additional expenditures, increased by 10 percent over the 2018 amended budget. 

Smith said the originally proposed 2019 base budget, plus additions, meant a 5.75 percent increase to the tax rate and a 12.46 percent increase to the property tax levy. With those numbers, the tax levy would increase by about $2.6 million.

Smith said the base budget is increasing by around $1.9 million, with the majority of that increase coming from personnel costs. 

Council member Tom Bartholomew said when the budget process first began, they were looking at a levy limit increase of around $3.8 million. That number is now down to around $2.6 million. 

Bartholomew suggested setting the tax rate increase at 6.5 percent. 

“It gives us room for negotiation and we can start talking and having a good, thorough discussion as to what we want to see for additions,” he said, adding he was concerned about infrastructure and public safety.

Council member Rosemary Piekarski Krech said the council has never passed the final levy at the high, proposed amount. She added there are some things that need to be talked about between now and December to decide what is going to be in the budget.

“I don’t want to constrain us too much and make us push the city backwards when I think we need to be moving forward,” she said. 

Council member Paul Hark said he would not like to go higher than a 6.25 percent tax rate increase, because that keeps the levy increase below 13 percent. He said the same discussions can be had about what needs to be removed from the budget.

Ultimately, the council decided to approve a preliminary tax rate increase of 6.25 percent. This puts the levy increase at around $2.7 million, which will give the city an additional $100,000 or so of tax money over the originally proposed increase.

An Inver Grove Heights home with a mean value of $265,369 in 2018 in will be valued at $283,385 for the next round of property taxes. With the preliminary tax rate increase of 6.25 percent, taxes on a mean-valued home will increase by $185 for the year.

The city is holding its truth in taxation hearing Dec. 10.

 

South St. Paul

At its Sept. 4 meeting, the South St. Paul City Council approved its preliminary budget and tax levy increase. The budget covers the city’s general fund, library, Doug Woog Arena, capital programs and debt services. 

Finance Director Michelle Pietrick said when the budget process began for this year, there was a levy increase of 12.21 percent, but since June the levy has decreased by over $300,000. 

“That was done through a combination of expenditures and revenue increases,” she said. 

The proposed tax levy was roughly $12.3 million, an increase of 7.68 percent over the previous year. Pietrick said the budget with tax supported funds is around $20.3 million. 

She said the biggest expenditures South St. Paul has are for public safety and public works, and that the need to increase the budget is driven by personnel costs.

Pietrick said a new initiative that is also a cost increase is the new police community outreach program, which will help handle rental housing oversight and enforcement. This means adding on officer and one clerical employee at a cost of $190,000 for the year. 

To bring in non-tax funds, Pietrick said, there’s been an increase in charges and fines associated with code enforcement, and fees for permits and licenses had also been increased. There were also increases in federal, state and county grants. 

The proposed tax impact on a mean-valued home worth roughly $196,000 would be a net city tax increase of $87 a year. 

City Administrator Joel Hanson said the city staff’s desire is to keep working on getting that number down while still have a workable budget. 

“The city has some unique needs, some of which are part of this budget process, and if we’re going to make dramatic changes we would have to decide on some service eliminations that would probably be painful or cause us some difficulties in other areas,” Hanson said.

Council member Bill Flatley said he hopes the council holds itself to the goal of reducing the budget even further. He said while he could vote for what was in front of him that night, he would not vote for it as the final budget come December. 

–Hannah Burlingame can be reached at 651-748-7824 or hburlingame@lillienews.com

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