The Free Press, Mankato, MN

Local News

November 30, 2013

State aid stabilizes taxes in N. Mankato

NORTH MANKATO — Think of property taxes like a three-legged stool: they’re a combination of levies set by your city, county and school district. So, any analysis of your property taxes should take this three-part format.

Here’s how the trifecta shakes out for North Mankato residents:

The city’s levy is stable. The county’s levy is up as much as 9.5 percent, but the rapid rises in farmland value will blunt that increase. The school district’s levy is dropping, though that’s more than offset by the referendum voters passed in November.

All told, homeowners in North Mankato whose homes don’t increase in value should see slight increases in their property taxes.

City holds the line

For the third time in 10 years, North Mankato’s levy will not change; it was preliminarily set at $5.4 million and cannot be raised before it’s finalized next month.

The 2014 budget’s primary purpose, according to a memo from City Administrator John Harrenstein, is to demonstrate “a plan is in place resolving the systemic fiscal issues leading to the (credit) downgrade.”

The city took a different strategy to resolve those issues — especially concerning the payback $3.2 million of internal loans — than were suggested by a consultant it hired.

The consultant recommended raising the levy by $100,000 next year (a 1.8 percent levy increase) to help pay back those internal debts. But the city has decided against raising the levy and will pay back those debts in an estimated 10 years instead of four.

That decision, combined with a state aid increase of $200,000, has allowed the city to maintain a zero levy increase. Thanks to a 1.1 percent tax base increase, a home with a stable value will actually have a slightly smaller North Mankato tax next year.

County land values rise

In that respect, the Nicollet County levy is similar. The tax rate is decreasing, but that’s thanks more to the rising tax base — due to valuation increases on farmland — than to levy restraint. The county also got an increase in state aid, in this case of about $260,000.

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