Marshall Council approves 4.3% levy increase

MARSHALL — Marshall’s city levy is set to increase by 4.3% in 2022. But in a budget presentation at Tuesday’s city council meeting, city staff and council members said it was important to look beyond just percentage increases in thinking about the levy’s impact.

Council members said the proposed budget and levy were as lean as city staff could make it, and there are still uncertainties local government could face in the coming year.

“We’ve had a lot of working meetings on this budget, and we have hacked, and talked, and asked the staff to cut, cut, cut,” said council member Steven Meister. “We’re doing the best we can, without the crystal ball that we need.”

On Tuesday, council members took three separate votes to approve a 2022 city budget, a 4.3% levy increase, and a five-year capital improvement plan.

The proposed 2022 city budget included about $14.19 million in general fund revenue and $14.34 million in general fund expenditures.

The 4.3% levy increase translated to an increase of about $312,000 from the 2021 levy, said Marshall City Administrator Sharon Hanson. Hanson said the city did not factor inflation into the 2022 levy, and would be facing some unknowns next year in terms of supply prices and other costs.

The levy increase would mean a property tax increase of $9 a year for a house valued at $150,000, or $31 a year for a commercial property valued at $250,000.

“This just shows the tax impact,” Hanson said. The estimates do not account for any changes in property value that could affect individual property taxes.

In a presentation of the proposed 2022 levy and budget, Hanson also talked about some of the factors affecting Marshall’s levy, and where it stood in comparison to other cities.

Hanson showed the council a chart of tax rate information for Marshall and about 18 other Minnesota cities in a similar population range. Marshall’s city tax rate fell in the middle of the pack, with cities like Waseca and New Ulm having the highest tax rates and cities like Willmar and Alexandria having the lowest tax rates.

Since 2011, Marshall’s tax capacity has had an average growth of 2.49% a year, Hanson said.

“Our historical tax levy increase average since 2011 is 4.13%,” Hanson said. “When you compare it with rate of growth, we’re less than 2% impact between rate of growth and the tax levy.”

“We’re seeing a shift on tax capacity market value to our residential units in the city of Marshall,” Hanson said. That would lead to residential properties paying a slightly bigger share of Marshall’s city property taxes in 2022 than they did in 2021. At the same time, commercial and industrial properties would make up a slightly smaller share of city property taxes.

“As most people know, I’m not really in favor of tax increases. But as the staff worked with us, 4.3% isn’t awful,” council member James Lozinski said.

At a certain point, Marshall officials and residents needed to think about whether they would be willing to cut back on services in order to keep the levy low, he said.

“I’ve asked citizens, and they don’t want their services cut,” he said.

Meister agreed with Lozinski that the city tried to keep its levy and budget low for 2022.

“We are bare bones. Anything more, and we are going to start cutting services,” he said.

In separate votes, the council approved a tax levy for 2022, the 2022 city budget, and a five-year capital improvement plan. Each vote passed 6-1, with council member Russ Labat casting the dissenting vote for all three items.


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