North Mankato city officials presented the proposed tax levy for the 2021 Budget at the September 8th City Council meeting. The 2021 tax levy is $6,893,333 million and is a $98,000 increase (1.5%) from the 2020 levy. All of the $98,000 increase is estimated to come from new construction in the community and will be used to support General Fund operations. The total taxable market value of the community increased by 4.4% to 1.24 billion dollars based on increasing property values and new construction.
“The good news for home and business owners is the proposed 2021 tax levy is estimated to reduce the overall tax rate by 1.5% and continues a seven-year period of tax rate reduction in the community,” says City Administrator John Harrenstein.
Finance Director Kevin McCann stated, “Owing to the effects of the COVID-19 pandemic, the levy balances the need to continue to provide exceptional municipal services and provides support to the property owners who pay for them. The proposed levy also marks the 7th consecutive year of decreasing the property rate in the city for a combined reduction of 6%.”
The City is also preparing its finances to handle the effects of the COVID-19 pandemic. With the state of Minnesota facing a 4.8 billion dollar budget shortfall in the next biennium, questions about funding for Local Government Aid remain. “We have budgeted no new revenue from local government aid in 2021, which reduces funding to the General Fund by $150,000. If the State determines to reduce Local Government Aid instead of maintaining its 2020 funding levels, additional cuts ranging of up to $360,000 will be required midyear in 2021,” says Harrenstein.
“The proposed 2021 budget does not include any pay increases for city employees but does maintain full staffing. In addition, until Local Government Aid numbers are released at the end of the 2021 Legislative session, the City will not plan to borrow any funds for scheduled CIP projects, which will delay CIP implementation for one year. These decisions will be revisited by the Council and staff in July of next year. “We’ve engaged in an ambitious capital improvement program over the past five years and are well prepared to navigate any financial impacts of COVID-19,” says McCann.