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Brainerd council approves 2% tax levy increase

Brainerd City Council members voted 6-1 Monday, Dec. 20, to set the final 2022 levy at $6,255,826, which is an increase of $122,663 or 2% over 2021.

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Brainerd City Council members discuss the 2022 property tax levy during their meeting Monday, Dec. 20, 2021. Theresa Bourke / Brainerd Dispatch

Although the city of Brainerd will collect more in property taxes next year, some residents could see a decrease in the city’s share of their taxes.

Brainerd City Council members voted 6-1 Monday, Dec. 20, to set the final 2022 levy at $6,255,826, which is an increase of $122,663, or 2%, over 2021. The one council member opposed was Gabe Johnson, who has a record of advocating for the lowest possible levy.

Even with the levy increase, a property owner with a residential property with an unchanged value of $140,000 in 2022 will see a decrease in the city’s portion of their property taxes by about $32. A property owner with commercial property at $363,500 can expect a decrease of about $181 under the same circumstances.

An increase in the city’s taxable capacity for 2022 led the tax rate to decrease from 73.43% in 2021 to 70.65% in 2022. The tax capacity for each property is based on the taxable market value, which equals the property’s estimated market value minus any tax exemptions, deferrals or value exclusions — like a homestead market exclusion. To determine the tax capacity, the taxable market value is then multiplied by the property’s classification rate, which is set by the state and differs based on how the property is used — residential, commercial, agricultural, etc.

If the city’s levy stays the same and its total tax capacity increases, the tax rate decreases. If the city’s levy stays the same and its total tax capacity decreases, the tax rate increases.

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Updates to the budget since the preliminary levy was passed in September include updated wages for the police officers’ union settlement, market adjustments for police chief and deputy police chief wages, updated wages for department heads and non-union supervisors with a 2.5% cost of living increase, and updated health insurance elections and rates.

During a council budget workshop in November, Finance Director Connie Hillman presented four ways to adjust the levy if the council wanted to settle on a number lower than a 2% increase, which is what the preliminary levy was set at in September. A final levy can be lower but not higher than the preliminary levy.

Adjustments included adding a levy stabilizer, reducing the debt levy, reducing the capital levy and reviewing revenue and expenditure line items. Each suggestion also came with cons, like whether extra funds would need to be added into future levies to make up for the difference, leading to larger increases.

Property owners saw fluctuating levies from about 2011-15, beginning with decreases of 1.4% and 2.5% in 2011 and 2012 and moving to increases of 12.6% and 10% in 2014 and 2015. From 2016-20, the levy increased between 3%-6.5% each year and increased 1% in 2021. The council approved a levy stabilizer of $102,000 in 2020, partially to avoid those peaks and valleys of the past.

No property owners spoke during the budget and levy public hearing earlier in December.

THERESA BOURKE may be reached at theresa.bourke@brainerddispatch.com or 218-855-5860. Follow her on Twitter at www.twitter.com/DispatchTheresa .

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Related Topics: GOVERNMENT AND POLITICS
Theresa Bourke started working at the Dispatch in July 2018, covering Brainerd city government and area education, including Brainerd Public Schools and Central Lakes College.
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