Marshall trying for levy increase of under 3%
MARSHALL — The city of Marshall will be looking at a possible levy increase of around 3% in 2021.
The Marshall City Council set a preliminary levy of about $7.3 million — a 3.5% increase over 2020 — back in September. However, there’s still a chance the final levy approved by the council will be lower than that, city staff said.
Marshall City Administrator Sharon Hanson said the city council and city staff have been working to get the preliminary levy down to a 3% increase, or even lower.
“Although the current projected 2021 levy is at 3%, staff intend to work on final numbers prior to the final levy/budget adoption at the Dec. 22 city council meeting. It is possible to come to the council with a slightly less than 3% increase for 2021,” Hanson said.
The proposed 3% levy increase would mean a tax increase of $10 for a home with a value of $150,000, Hanson said. A businesses valued between $250,000 and $500,000 would see a tax increase of between $35 and $75 for the year.
City staff members and the council discussed the 2021 budget and levy earlier this week, as part of the annual “Truth In Taxation” presentation. The city will need to approve a final 2021 budget and levy by the end of the month. The final levy can be lower, but not higher, than the 3.5% preliminary levy.
Hanson said Marshall’s tax rates are still competitive compared to other Minnesota cities. Marshall’s tax rate of 58.41% was lower than tax rates in cities like Hutchinson, New Ulm and Brainerd.
Hanson said the city’s general fund budget accounts for the bulk of the 3% levy increase, compared to some of the city’s other budgets that have fees for services. The biggest impact on the general fund budget was personnel costs like salaries and health insurance. Other revenue sources like fees and charges for services are budgeted to have a near zero increase, she said.
Several different factors affect the budget and levy for next year, Hanson said. One example is the impact of Local Government Aid funding.
“We did receive a small increase in LGA, nearly $50,000 in new revenue,” Hanson said. “This helps our 2021 levy by reducing it just over half of a percent.”
Hanson said the 2021 budget includes $125,000 of reserve spending, to help reduce the levy.
A smaller budget impact will come in the form of a $17,000 expense, which comes from home and commercial tax abatements the city enacted over the past two years. The tax abatement program allows people building new homes or businesses in the city to apply for an abatement on a portion of their property taxes. The city reimburses the property owners when they pay their taxes.