MANKATO — As long as they don’t own farmland, most Mankato taxpayers should be seeing a slightly smaller tax bill next year.
The county and city are planning to raise their levies about 2.6 percent each, and the school district is planning for a 2.2 percent decrease.
In other words, local officials won’t have to ask for big tax increases during public hearings on their respective budgets in coming days.
City plans shifts
Of the three big local governments, the city of Mankato has the largest increase in revenue next year — its planned-for 2.6 percent levy increase is deceptively small, for two reasons.
First, the city is transferring a library levy of about $520,000 to the county, equivalent to a levy increase of about 3.7 percent. In other words, the levy rise would by 6.3 percent if the library transfer hadn’t happened.
In addition, $500,000 left the budget and will be replaced by a fee on utility bills for street lights. The City Council must approve the move during its Dec. 10 public hearing before it takes effect.
But the Mankato levy cannot legally rise more than 2.63 percent, a limit set by the council in September, so that’s all that taxpayers will see on their bills next year.
The levy itself, though, is only one of two major pieces of your tax bill. The other piece is land value and, for the county as a whole, the tax base. In Mankato, the tax base fell slightly, about .3 percent. This means that even a 0 percent tax increase would have caused higher tax bills. Still, the decline is so slight its effects will barely be felt.
County takes shift
While Blue Earth County’s levy is slated to rise by an identical 2.6 percent, commissioners will likely tell attendees of their Dec. 11 budget hearing about the flip-side of the library transfer.
Of that increase, only .57 percent isn’t due to the transfer of library costs onto the county side of the tax bill.
The County Board’s preliminary increase, set in September, was about 4 percent; it was reduced after the county made some cuts to building items and discovered revenue it wasn’t expecting. The delayed building projects, such as $15,000 to upgrade the log cabin at Bray Park, were relatively small line items.
How was the county able to limit the levy increase to one-half of 1 percent without making major cuts?
County Administrator Bob Meyer said downward trends on several line items — such as overtime, out-of-home placement for foster care and building heating — allowed the county to reduce its projections for 2013 spending.
“All those things came together with us being able to reduce some of our projects and hold the line on levy increases,” Meyer said.
Countywide, the tax base increased by about 5 percent — almost entirely on farmland. This ends up helping owners of homes and businesses because they become responsible for a smaller proportion of the tax “pie.”
“We’re clearly seeing a shift in the pie from residential, commercial and industrial ... their tax burdens are going down while the ag properties are going up,” Meyer said.
The results of this shift are visible on a theoretical $150,000 residential parcel. Though the city and county had identical levy increases, the city’s taxes on such a parcel would rise $9, while the county’s would decline by $17.
Schools lower levy
Mankato Area Public Schools plans to reduce its regular levy by 2.18 percent, but the effect is just about canceled out by a slight rise in the 2007 voter-approved levy. The levy rises because of inflation — by about 9 percent since 2007 — and because of rising enrollment.
The result: A $150,000 home would only pay a few dollars more in property taxes next year to the schools.
The regular levy is declining in large part because the district is reducing its debt payments by about $500,000, to about $6 million in the next fiscal year, said Jerry Kolander, the district’s director of business affairs. Schools operate on fiscal years that begin July 1.
As it is in Mankato, the effect of the tax base change is negligible. It declined by about a half-percent across the district.