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NORTH MANKATO — North Mankato property owners will see a lower tax levy in 2021, but many homeowners will see their home valuation increase from between 5% and 10% and will likely see a higher property tax bill.

On Dec. 21, the City Council is expected to approve a final budget and tax levy that will reduce the current tax rate of 49.66% to 48.9% next year. The city has reduced the tax rate in each of the last seven years with the tax rate falling 6% since 2013.

Because of new construction and increased property valuation, the city expects to collect about $189,000 more in property taxes compared to this year — an increase of 2.8%.

While some homeowners will see their valuations increase from 0-5%, most are in the 5-10% valuation increase range.

Taxes on a median-valued home — $302,000 — will be $4,168 in 2021.

The taxable value of property in the city will increase 4.2% or $51 million in 2021. Of that valuation growth, 40% comes from new construction in the city in 2020.

Of property taxes paid by North Mankato property owners, 39% goes to the city, 44% goes to Nicollet County and 17% goes to the school district.

North Mankato will collect $6.98 million next year for its budget. Of that, about $5.2 million goes to the general fund and $1.2 million to pay debt service. About $75,000 goes to the Port Authority.

For every dollar of taxes collected by the city, 28 cents goes to public works, 27 cents to public safety, 21 cents to parks/rec/leisure, 9 cents to general government and 7 cents to community development.

The city has in recent years been replacing old streets and infrastructure in lower North Mankato. But with concerns over state aid and other budget problems that might arise from the pandemic, the City Council said it wants to wait until next year to decide if it should borrow for more big street replacement projects.

But North Mankato has $561,000 budgeted for next year to do a number of mill and overlays on streets.

The city also has more than $213,000 in park improvements planned for next year.

Mayor Mark Dehen said at an earlier meeting that while they’re comfortable with the city’s budget projections next year, the city won’t know how Local Government Aid will be affected by the economic pressure from the pandemic. The city currently gets about $1.6 million in LGA from the state. The state, faced with coming budget deficits, will not develop its next budget until next spring.

“The problem is we are doing our budget now but we won’t know what the Legislature will do until June, when we’re half way through our budget year,” Dehen said.

City Administrator John Harrenstein said the city was slated to get a slight increase in LGA in 2021, but the city is preparing in case the increase doesn’t come or if LGA levels are reduced in 2022.

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