Brainerd council raises 2020 tax levy 3%; some taxes may decrease
Despite the 3% levy increase over 2019, some taxpayers may see a decrease in property taxes because of an overall increase in market value for city properties, leading to a projected decrease in Brainerd's 2020 tax rate.
Three percent is the settled upon number for Brainerd’s 2020 tax levy increase.
The final number is lower than the council’s preliminary levy, set at a 4% increase from the 2019 levy in September.
After passing the preliminary levy, city council members are allowed to decrease but not increase the final levy. During a meeting Monday, Dec. 16, the Brainerd City Council approved a slight decrease from the preliminary number on a split 4-3 vote.
Council member Dave Badeaux made the initial motion to set the 2020 levy at $6,072,439, a 3% increase over 2019, noting he wanted to give residents a little bit of a tax break.
“This is a situation in which we have the ability to show the citizens of Brainerd a little bit of reprieve from their taxes,” he said. “I’d like to make sure that we’re understanding that it’s not just us. There are county taxes, there is money coming from the school district as well.”
Badeaux also noted increasing property values, which a resident brought up during the council’s truth in taxation hearing last week. Max Day was concerned about the 11.5% increase in his property value, which he said contributed to an overall 26% property tax increase over the last two years.
“Dollar amount, jumping between percentages is not a huge amount, but it shows a lot toward the citizens when they look at that percentage,” Badeaux said. “I think it really says a lot to people that we are looking out after them, that we are trying to make sure that we’re being fiscally responsible with their money.”
At the same time, a 3% increase, Badeaux said, is large enough to set the council up to avoid a giant increase in the future, as expenditures are always going to rise from year to year.
“But I think it’s important to show people that we’re willing to compromise a little bit and that we’re not just looking to keep pushing the taxes up to keep filling in money as we go,” Badeaux said.
Council member Kelly Bevans said he would prefer the 4% increase but could make do with 3%.
“I don’t think it’s the best for the citizens of Brainerd. I think we do run the risk of under-levying because of the projects we have going this year — city hall and the parks, for specifics,” Bevans said, adding again he would still be OK with a smaller increase.
Council members Kevin Stunek, Dave Pritschet and Tad Erickson agreed with Bevans’ feelings, with Stunek adding he didn’t think he would get enough support for a 4% increase and Pritschet still leaning more toward the 4%.
Council member Jan Lambert opposed the motion, backing a 4% increase instead because of the upcoming projects Bevans mentioned.
Mayor Ed Menk — who does not vote except in the case of a tie — also urged council members to think about projects like the city hall remodel and Memorial Park redesign, reminding them of the $1.3 million they agreed to allocate for Memorial Park earlier this month.
Though the council already added money to the 2020 debt levy to begin paying for the project, Menk still maintained the city will likely need that extra 1% to pay for unforeseen expenses in the next year.
Council President Gabe Johnson, on the other hand, who has a history of pushing for more fiscal conservatism, opposed the 3% increase on the grounds of it being too high. As a 1.27% increase would create a perfectly balanced budget, Johnson said he supported a levy closer to that amount.
“Three percent and 4% is just taxing a lot of money that we haven’t found a purpose for yet,” Johnson said. “And we should probably know what we’re spending the money on before we take it from the citizens.”
Pritschet joined Johnson and Lambert in opposing the 3% increase, but the motion passed with the support of Badeaux, Bevans, Stunek and Erickson.
Estimating the impact
Because of an overall increase in the estimated market value for city properties, Brainerd’s tax rate is projected to decrease in 2020, meaning some property owners will see a decrease in the city portion of property taxes even with a 3% levy increase.
Homeowners with residential property valued at $120,000 will see an annual decrease of $12.47 if their property value remains the same in 2020.
In the same situations, taxpayers with commercial property valued at $363,500 would see an annual property tax decrease of about $84.63.
Any increases in the estimated market value for properties, however, would likely drive up taxes. Currently, the city’s 2019-20 total estimated market value sits at $739,083,200 — a $34,078,500 or 4.8% increase on the $705,004,700 figure for 2018-19 assessment. This figure includes a 6.5% and 6.3% increase for residential and “other” (ag/rural, park land, and personal) properties, respectively, while industrial/commercial properties lost 1.5% in estimated value, continuing a decades long trend.
Brainerd’s total tax capacity for 2020 has been estimated at $7.73 million compared to $7.39 million in 2019, $7.23 million in 2018, $7.2 million in 2017 and $7.07 million in 2016.
Non-property tax revenues in 2020 are expected to total about $8.1 million, or a 6.5% increase over 2019 because of the increased local government aid funds and permit revenue from school district projects.
Behind the numbers
Finance Director Connie Hillman previously said she expects the city’s expenditures to total about $14 million in 2020, an increase of about $471,000 — or 3.71% — over 2019. Some of the major factors behind that increase include an extra police officer, increased employee health insurance rates, a 2.5% increase in the library’s budget to pay to the Kitchigami Regional Library System and increased funding to Sourcewell for assistance on the city’s Riverfront Project and comprehensive plan update.
The city’s 2020 debt levy was set to decrease by $117,000 after paying off previous projects, but council members opted to keep that money in the budget to begin saving for the $1.3 million Memorial Park redesign, which includes two hockey rinks to double as pickleball courts in the summer, a pleasure ice rink, a four-season warming house, a playground, horseshoe pits, a picnic shelter and two bituminous walking/biking paths, along with upgrades to the softball field lights and concessions area.
THERESA BOURKE may be reached at email@example.com or 218-855-5860. Follow her on Twitter at www.twitter.com/DispatchTheresa .