Baxter City Council members approved a 2021 preliminary tax levy of $7,256,500 -- or a 5.5% increase -- in a special budget meeting Tuesday, Sept. 22.

Brad Chapulis, city administrator, described it as a need not a want budget.

In budget discussions via Zoom, the preliminary 2021 levy of $ 7,254,500 amounted to a $375,900 increase from 2020, or a 5.4% increase. Tuesday, the council considered the Brainerd Lakes Area Economic Development Corp. cuts after council member Zach Tabatt suggested revisiting that and giving BLAEDC the amount requested.

“Overall, I would say what I saw on this budget seems like a lot of reasonable things that are necessary to keep our service levels the way they were, so I’m not seeing anything else that I would lower further from what they’ve already clearly cut,” Tabatt said.

Chapulis said it wasn’t a cut to the BLAEDC budget; it was an adjustment to what they were requesting for additional funds. Chapulis said the city’s proposed budget included a 3% increase in funding for BLAEDC compared to last year while BLAEDC requested a 9.38% increase, equaling $35,000. The city’s preliminary budget had reduced the funding for that request to $33,000 or a 3.13% increase compared to last year. The 2020 budget for BLAEDC funding was $32,000.

“If we think as a group that now is the time to invest in economic development a little bit further, I’d push for investing a little bit more in our economic development,” Tabatt said.

Council member Connie Lyscio agreed with Tabatt and said she would rather fund BLAEDC’s full request given it was just a few thousand dollars more.

Jeremy Vacinek, finance director, said the preliminary numbers show an estimated tax capacity of $13,142,274 based on the increase in valuation, but he cautioned those numbers won’t be known in detail until later this fall. Based on changes in numbers this spring compared to last year, Vacinek said the average valuation for residential property increased 3.5% while the commercial/industrial had an average increase in value of 8.9%, which is a change from the recent past when commercial/industrial values were declining while residential was increasing.

Council member Mark Cross said he appreciated what staff has done to create a budget that holds the line and cutting requests.

“I don’t think anywhere in here we’ve looked at increasing things to 9 and 10%,” Cross said, noting he was for a 5% increase for BLAEDC but would rather go with the amount presented by staff.

The question then was whether to wait to discuss this further at the next regular meeting or go ahead with the preliminary levy, noting the council could still reduce the amount before the final decisions are made in December.

The council agreed to go with the 5.5% increase for the preliminary levy.

Mayor Darrel Olson thanked staff members and the council members for their efforts on the budget.

What those numbers mean

Based on the preliminary levy for 2021, the impact to residential and commercial properties would be:

Residential home

2020 value: $76,000.

2021 estimated value: $78,675.

2020 actual city property tax: $254.

2021 proposed property tax: $268.

Change: $13

Change percentage: 5.3%

Residential home

2020 value: $250,000.

2021 estimated value: $258,000.

2020 actual city property tax impact: $1,312.

2021 proposed property tax impact: $1,352.

Change: $39.

Change percentage: 3%

Small commercial/industrial

2020 value: $500,000.

2021 estimated value: $544,500.

2020 actual property tax impact: $5,160.

2021 proposed property tax impact: $5,597.

Change: $437.

Change percentage: 8.5%

Renee Richardson, managing editor, may be reached at 218-855-5852 or renee.richardson@brainerddispatch.com. Follow on Twitter at www.twitter.com/DispatchBizBuzz.