The Brainerd City Council hosted its 2020 truth in taxation public hearing Monday, Dec. 9, at the Crow Wing County Historic Courthouse to get input on the property tax levy for next year.
The preliminary levy currently entails a 4% increase. At this point, with the preliminary levy set, that figure can be decreased, but not increased before it's submitted by the end of the year. The council will formally rule on the levy during its next meeting Monday, Dec. 16.
Max Day, a resident of Northeast 13th Avenue, spoke at the hearing on an 11.5% hike in value for his property and added his total tax bill has risen 26% in the last two years.
Day said he’s a senior citizen who depends, in part, on Social Security benefits that don’t increase much more than 2% per year. Day observed he found the evaluations inaccurate and tax increases “disturbing” while he had made no changes to the property in recent years.
“I’d like to sell my house for what they have it valued at,” Day said wryly.
“Amen,” Council President Gabe Johnson said amid chuckles around the room.
City staffers noted it would likely be an issue best posed to county officials and assessors, as the city of Brainerd had little bearing on the change in valuation Day was subjected to. Johnson noted it’s a multifaceted issue, as Day would be subject to a 4% increase by the city of Brainerd, but also tax increases by Crow Wing County and the Brainerd School District, which passed a $205 million bond referendum last year.
Furthermore, much of it comes to the property value evaluation over change in tax rates, said Finance Director Connie Hillman, while the city of Brainerd would have given a $10 break if the value remained steady from 2019. Staffers urged Day to request a county property evaluator to come out and reassess the property, ensure its properly classified, and explain the impact on his tax rates.
Day said he expected some increase in estimated value on his property, but was surprised and disconcerted by the jump — which, he further noted, is a similar predicament that’s been expressed to him by neighbors in northeast Brainerd.
In turn, council member David Badeaux took Day’s case as a reminder that Brainerd’s tax levy — however large or small in scope — compounds the total tax burden experienced by residents of the city. Badeaux had expressed misgivings with raising the tax levy as high as 4% in previous budgetary discussions earlier in the year.
“We have to remember that we have increased taxes. Every percentage gets tacked on to people's taxes,” Badeaux said. “I know throughout this process that we’re looking at only 4%, but every percent counts.”
In light of Johnson’s 37th birthday, City Administrator Jim Thoreen used his baritone voice to lead everyone through a spontaneous rendition of “Happy Birthday” to close out Tuesday’s hearing.
The tax levy rundown
A 4% increase would make for a 2020 levy of $6,131,395, or $235,823 more than the 2019 levy.
Because of an overall increase in estimated market value for city properties, the city’s tax rate is projected to decrease in 2020. That means some property owners would see a decrease in property taxes even with a 4% levy increase.
With a 4% levy increase, a property owner with a home valued at $120,000 would see an annual property tax reduction of about $5.29, provided the property value remains unchanged in 2020. A business valued at $363,500, would see an annual property tax decrease of $34.62 under a 4% levy increase.
During the hearing, Finance Director Connie Hillman said she expects the city’s expenditures to increase by about $471,000 in 2020. Total expenses for 2020 are estimated at about $14 million, roughly a 3.71% increase over 2019 expenditures. A few of the major factors behind that increase are an extra police officer, increased employee health insurance rates and increased funding to Sourcewell for assistance on the city’s Riverfront Project and comprehensive plan update.
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.
A couple items still up in the air in the coming year are changes to Memorial Park and the possibility of a children’s museum in Lum Park.
Note: This story was updated Dec. 16 to reflect the most recent editorial revisions.