The Baxter City Council approved a preliminary levy with 9.9% increase

BAXTER — The Baxter City Council approved a preliminary tax levy of $8,504,500 — a 9.9% increase over 2022 — on Sept. 20.

Three of the five council members — Connie Lyscio, Zach Tabatt and Mayor Darrel Olson — voted on the preliminary budget. Mark Cross was absent and John Ward arrived at the end for council comments after participating in a candidate forum for Brainerd School Board, for which he is running.

“So I don’t know if it would be fair to say, everyone in the room — since it’s only three of us tonight — agrees that we would still like to go lower but knowing that there’s two voices not at the table, is it smart to just save everyone the time right now to approve the preliminary as it stands and then have the discussion about the things we brought up and just kinda be more efficient?” Tabatt said.

“And know we could reduce it,” Lyscio said after agreeing with Tabatt.

The final levy, which will be set in December, can be lower but not higher than the preliminary number.

The original proposed budget for 2023 included an 11.8% increase in the levy from the previous year. However, the budget was adjusted following a Sept. 6 work session.

Changes in the budget included:

• Projected additional Sprint tower rent revenue of $15,300.
• A decrease of $86,300 by delaying the replacement of a new public works truck and dump truck until 2025.
• A decrease of $19,200 due to the delay of the Public Works Maintenance I position starting date to July 10, 2023.
• A $9,100 reduction to personnel costs.
• A reduction of $12,300 to street building and equipment repairs.
• A reduction of $1,500 to parks professional services.
• A reduction of $6,300 to parts utility trainer replacement.

Lyscio made the motion to approve the 9.9% increased preliminary levy with “the strong hope and belief that we can reduce it.” Tabatt seconded.
The tax capacity rate is projected to decrease from 57.529% in 2022 to 52.885%. There will also be a tax burden shift from the commercial and industrial classification to residential due to the significant 32.2% average increase in existing residential valuations.

Contributed

This means a residential home valued at $76,000 in 2022 could increase to an estimated value of $100,472 in 2023, based on the average estimated market value changes. With the preliminary levy as approved, the tax paid by this homeowner would increase by 32.6% — from $262 to $348 with a $86 difference in taxes paid from 2022 to 2023.

A residential home valued at $175,000 in 2022 could increase to an estimated value of $231,350 in 2023. From the city’s preliminary estimates for the property tax impact, the tax paid by this homeowner could increase by 17.1% — from $883 to $1,034 with a $151 difference from 2022 to 2023.

A residential home valued at $250,000 in 2022 could increase to an estimated value of $330,500 in 2023. The tax paid by this homeowner would increase by 14.9% — from $1,353 to $1,554 with a $201 difference from 2022 to 2023.

A small commercial or industrial property valued at $500,000 in 2022 could increase to an estimated value of $509,750 in 2023. The tax paid on the property would decrease 14.6% — from $5,321 to $4,545 with a $776 saving from 2022 to 2023.

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.

The council members unanimously approved the preliminary budget with the hopes of decreasing it further before it is finalized in December.

The council also set a public information meeting to review the 2023 budget and levy with a public hearing for 6 p.m. Monday, Dec. 5.

SARA GUYMON, Brainerd Dispatch, staff writer, may be reached at 218-855-5851 or sara.guymon@brainerddispatch.com