Taxes headed back up in 2011
Burnsville council approves 5.6 percent maximum hike after austerity measures in 2010
by John Gessner
Thisweek Newspapers
In stark contrast with this year’s austerity measures, Burnsville will raise 2011 city taxes by up to 5.6 percent and avoid deep budget cuts next year.
The City Council voted 3-2 on Sept. 7 to certify a maximum levy increase of 5.6 percent. That would raise an extra $1.48 million, for a total levy of $27.97 million.
Final council approval of the 2011 budget and levy is expected Dec. 7. The levy can’t exceed 5.6 percent but can be reduced.
A public “open house” on the budget will be held Nov. 30 at 4 p.m. at City Hall.
Owners of properties already contributing to the tax base would shoulder 1.7 percent of a 5.6 percent increase, according to city staff.
The rest would come from resumption of taxes flowing to the city following decertification of a tax-increment financing district in the Southcross Corporate Center (3.3 percent), and from taxes generated by new construction (.5 percent).
City taxes on an average-valued home ($208,000) would rise by about $30 under a 5.6 percent increase. City taxes on the same property were cut by about $25 this year, the city says. The figures presume an 8.4 percent loss in property value from 2010 to 2011.
City taxes on $1 million of commercial/industrial property would rise by about $455. A 5.7 percent loss of value is presumed.
A year ago, property owners got a break after council members, citing the bad economy, voted unanimously not to raise the 2010 levy.
Loss of state aids and other revenue, combined with the tax freeze, forced $3.5 million in budget cuts – equal to slightly more than 10 percent of 2010’s general operating fund. Cuts included elimination of 20 full-time positions and a freeze in nonunion wages for 2010.
Supporters of the 5.6 percent maximum hike said it’s justified after this year’s budget carnage. Doing less would be “irresponsible,” Council Member Dan Gustafson said.
“At some point, it’s got to stop,” said Gustafson, who was joined by Mayor Elizabeth Kautz and Council Member Mary Sherry in voting for the increase. “We’re here to give service to the city. We’ve got to quit putting people out of work.”
Council members Charlie Crichton and Dan Kealey voted against 5.6 percent, calling instead for a 3.7 percent hike. That would essentially erase the 1.7 percent increase shouldered by properties now generating taxes for the city.
“We have got to face the fact that people are not getting more money,” Crichton said.
Kealey said the council should have challenged staff budgetmakers in June, when the council started budget talks, to find more savings.
“I think we all are coming off a year or two of budget-cutting fatigue,” he said.
Kealey cited reports he’s gotten from Burnsville businesses about steps they’ve taken to weather continuing economic doldrums.
Permac Industries cut 50 percent of its staff, said Kealey, who was at Permac on Labor Day, appearing with Republican gubernatorial candidate Tom Emmer as he outlined proposals for business tax cuts.
Another business cut its 401(k) match, Kealey said.
A 3.7 percent levy increase “in most people’s minds, that’s plenty, given the economic situation,” said Kealey, adding his disappointment that the city’s unions wouldn’t reopen their contracts at the council’s request last year to help tackle the budget problem.
Sherry said she’s relieved that the increase needed to maintain city services came in lower than the 8.4 percent of earlier projections.
“I will support this (5.6 percent) with the confidence that the staff will continue its momentum to bring this number down,” Sherry said. “I think we can do better than this.”
In separate votes, the council unanimously approved a $460,000 levy for the Economic Development Authority. The EDA levy is part of the 5.6 percent increase.
A total of $410,000 is dedicated annually to paying construction debt on the Burnsville Performing Arts Center. The remaining $50,000 will be split between continuing economic-development functions and a new, $25,000 contribution to the ITASCA Group, a regional economic-development consortium.
John Gessner is at burnsville.thisweek@ecm-inc.com.
