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Baxter looking at 2 percent tax rate increase
Staff Writer BAXTER - The need to reduce debt on bonds and make up for lost state funding has Baxter considering a tax capacity rate increase of 2.43 percent for 2010.
The Baxter City Council on Tuesday unanimously approved a preliminary levy of $5,730,500, a $216,800 increase from the 2009 tax levy.
The increase, if maintained by the council during subsequent budget meetings, would result in the tax capacity rate increasing from 42.18 percent to 44.6 percent.
By law the city needed to set a preliminary budget and levy by Sept. 15. Once the preliminary levy is set it can be reduced but not increased.
The increase includes $17,000 for the debt service and $199,800 to cover the reduction by the state of the city's Market Value Homestead Credit, Finance Director Jeremy Vacinek said in a memo to the council.
Vacinek noted to maintain the existing 42.18 tax capacity rate, the proposed 2010 tax levy would need to be reduced by $311,000, which would significantly affect services.
Baxter resident John Sullivan said with the tough economy, stagnant construction, market values not matching real property worth and high city fees the city should reduce its tax levy.
"The city of Baxter must become a party to tightening its purse strings," Sullivan said.
Baxter resident Bob Miller said the city needed to address employee salaries, which he felt were too high. Miller noted some employees would receive increases as high as 9.97 percent, with several other receiving 3 percent to 8 percent increases, including such benefits as health insurance, Social Security and vacation.
"I beg you to find one person out there in a comparable position in the private sector making this kind of money," Miller said. "You all ought to be ashamed of yourselves."
Council member Jim Klein said he appreciated Miller's concern and noted the city was obligated to pass the preliminary levy Tuesday. He said the levy can go down after that. Miller replied that the city says that every year.
"Like they say, it ain't over until the fat lady sings," Klein said.
The council changed a Nov. 12 budget work session to 6 p.m. on Oct. 14 at city hall and set a public hearing for review of the 2010 budget and levy at 6:15 p.m. on Nov. 30 at Baxter City Hall.
Final adoption of the budget and levy is scheduled at 7 p.m. on Dec. 1.
MATT ERICKSON may be reached at matt.erickson@brainerddispatch.com or 855-5857.
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