Baxter City Council approves 7.3% tax levy increase
The city uses property taxes as the main source of revenue for its budget, accounting for 85.4% of its total expected revenue.
BAXTER — Baxter City Council members voted unanimously Tuesday, Dec. 6, to set the final 2023 levy with a 7.3% increase over last year.
The final property tax levy was set at $8,304,500, an increase of $565,500 from the 2022 levy and a $200,000 reduction from the preliminary levy approved in September.
During a Monday public informational meeting, over 20 residents gathered at city hall to express their concerns with rising property taxes. However, the City Council was unable to answer most of the questions asked, given Crow Wing County determines residential home values, not the city.
The value of residential properties in Baxter increased this year by an average 32.2% over the previous year, while commercial and industrial property values increased by an average of 1.95%. Because of the significant differences between these increases, the tax burden in the city is shifting from commercial and industrial to residential, according to city officials.
Baxter uses property taxes as the main source of revenue for its budget, accounting for 85.4% of its total expected revenue. Of the property taxes collected, $6,606,400 goes to Baxter’s general fund, $387,000 will be used for collector street funds, $100,000 is set for community development funds and the remainder will be distributed between funds for capital parks, cemetery, capital projects and economic development.
Baxter’s tax rate is projected to decrease from 57.529% in 2022 to 51.680% next year. The tax rate is determined by dividing the levy by the city’s taxable net tax capacity, which is the total of the net tax capacities of all properties.
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 or something else.
The bottom line
With the new tax levy, a residential home valued at $76,000 — increased to $100,472 this year, based on the average — should see a property tax increase of 42.4% for Baxter’s portion in 2023. The estimated property tax would increase from $262 to $374, a $112 difference.
A $175,000 residential home increased in value to $231,350 would have a 25.8% tax increase. The increase would be from $883 to $1,111, $228 more.
A $250,000 residential home experiencing a value increase to $330,500 would have a 23.3% tax increase next year. The estimated property tax would increase from $1,353 to $1,669 or $316 more.
A small commercial or industrial property previously valued at $500,000 and seeing the average increase to $509,750 would see taxes decrease 8% from $5,321 to $4,881, a $440 difference.
Some notable expenses and changes in the budget include:
- $40,000 for fuel expenses, increased $2,000 due to higher gas prices.
- $19,600 funding to The Center in Brainerd, increased 3.16% from the previous year.
- $110,000 for street salt and sand, increased $20,000 from the previous year.
- $71,000 for contract plowing, increased $17,000 from the previous year.
- $165,000 for crack sealing, increased $62,000 from the previous year.
- $20,000 for professional services for tree removal in street rights of way, increased $5,000 from the previous year.
- $50,000 for vehicle and machinery repair, increased $20,000 from the previous year.
- $21,500 for landscaping, increased $3,500 from the previous year.
- $37,000 for the Brainerd Lakes Area Economic Development Corp., increased $1,000 from the previous year.
- $95,100 funding for Knollwood full depth reclamation improvement project.
- $180,200 for 2023 full depth reclamation street improvements.
- $621,900 estimated payment to Brainerd for airport revenue sharing agreement.
- $5,330 to the Initiative Foundation.
- $8,000 for the Fourth of July fireworks in Brainerd.