Agreeing that the difference between a 2 and 3 percent increase in the 2011 local property tax levy was minimal in relation to the financial impact on the average Crookston homeowner, the city Finance Committee today unanimously recommended full city council approval later this month of a 3 percent increase.
A 2 percent increase had been the figure discussed mostly in meetings over the past couple months, but a 3 percent rise emerged over the past couple weeks, and City Clerk/Treasurer Betty Arvidson was subsequently asked to crunch some tax impact numbers. Arvidson's numbers, based on 2010 market value figures, project a $7.99 city tax increase in 2011 with a 2 percent levy increase, and an $11.98 city tax increase with a 3 percent hike. The average home market value in Crookston is around $78,000, City Administrator Aaron Parrish said.
The main caveat that could alter the tax impact, he said, is that the figures are based on 2010 market valuation data. If the city's tax base shows growth in 2011, Parrish said the tax impact on homeowners could even be less. Tax base growth could be spurred by the decertification of a downtown tax-increment financing district that had been in place for many years. But, he cautioned, that could be offset by more residential properties being removed due to flood control projects and, therefore, coming off the tax rolls.
Still, committee members concluded that the impact on the average homeowner in the city will be fairly minimal, even with a 3 percent levy increase. In Crookston, one of the poorest cities in Minnesota in terms of property wealth, a 3 percent increase will raise around $54,000 in additional revenue.
Ward Three Council Member Keith Mykleseth made the motion to recommend council approval of the 3 percent levy rise. "Given the uncertainty with LGA (Local Government Aid from the state), I'd go with three," he said.
"Two or 3 percent doesn't really make a lot of difference at this point," added Mayor Dave Genereux. "We'll see what the next two or three months brings."
That's because, between now and December, when the city must certify a final 2011 budget and levy, the state allows the preliminary city tax levy approved in September to be decreased, but not increased.
As they often do, officials compared their actions with those in East Grand Forks and Thief River Falls. Parrish said the East Grand Forks council is poised to OK an approximate 7 percent preliminary levy hike, but he stressed that the council there typically approves a larger preliminary levy, then scales it back some before certifying it in December. "They have a different philosophy than us when it comes to that," Parrish explained. "I think their way is a little confusing to taxpayers."
