North Mankato tax levy hike would fund new police, cover higher costs

·3 min read

Sep. 12—NORTH MANKATO — North Mankato City Council members appear to agree that the tax levy for 2023 will be at least 7.7% higher than this year.

While no council members at a Monday workshop suggested the levy hike should be lower than that, the council will next week look at three other options that would let them set the possible increase higher, to as much as about 13% above this year's level.

But none on the council appeared eager to push the tax levy much, if any higher.

Mayor Mark Dehen warned against pushing much beyond the 7.7% increase city staff believes is needed for next year, saying both the school district and Nicollet County are likely to also be increasing their property tax levies for 2023.

Dehen said raising the city's share of the property tax increase much higher would simply add more burden on property owners who are also seeing their personal budgets stressed.

City Administrator Kevin McCann told the council during the workshop that the proposed levy would generate an additional $546,000 in revenue for the city, with $424,000 of that going to the general fund and $122,000 dedicated to the debt service fund.

The proposed tax increase will hit homeowners hardest as they will pay a larger share of city taxes. That's due to skyrocketing increases in the assessed value of homes, which were driven by dramatic jumps in the actual sale prices of homes sold last year.

The 7.7% levy increase would allow for the hiring of one additional police officer. Higher levy amounts would allow for hiring two new officers, which the department had requested.

The levy hike also will cover expected wage hikes for city employees, as well as an 8% increase in the street department budget and a 14% hike in the parks department. McCann said the park projects would include delayed improvements at the newer Benson Park in upper North Mankato.

The city would see a 15%, or $10,000, decrease in miscellaneous spending, due to the city eliminating the purchase of fireworks that used to be bought for Fun Days.

Like other cities, North Mankato also is facing higher costs as the flow of pandemic-relief federal money comes to an end. North Mankato, for example, will have to come up with an additional $60,000 in taxpayer funding for transit services next year as the supplemental federal funding ends.

While city budgets and tax levies increase, the city continues to make progress on reducing its tax rate each year. In 2015, the tax rate was 53.6%, on the high end of neighboring cities and other Minnesota cities of similar size. That rate has fallen each year since and is slated to be at about 44% next year (down 3.75%). That would bring the rate down to about the same as Mankato's and put North Mankato's rate in the bottom third of similar-size cities in the region.

At its regular Sept. 19 meeting, the council will officially set a proposed tax levy. Under state law, that proposed levy can't go higher when the final budget and levy are approved in December, but the council could set a final levy that is lower.