Budget season 2011

I started this post back in September.  Unfortunately, before writing much I decided to reread my posts from last year on budgets, budget policy, budget development, budget questions, and tax levies.  It was a thoroughly dispiriting experience.  With but a few minor changes, I could simply repost them and the questions, concerns, and issues would be equally relevant in 2011.

The 2012 budget/tax levy situation thus far:

The Council adopted preliminary tax levies and budget at our meeting on September 6 (State law requires we take this action by September 15; Charter requires it by the first regular meeting in September).  The proposed levy sets the maximum amount we can levy which is also the amount which you will find on your proposed property tax notice from the county (which also includes the public hearing date for each jurisdiction for you to make a statement to the county, school and/or city about your taxes).

The practical purpose of the levy is to set the maximum levy which staff then works to reduce by the time we much adopt the final levy in December.  There is a temptation here, I think, to set the levy high and to vote to adopt it because it’s “just preliminary.”  I got to the Council by way of the Planning Commission, however, and in land use it’s the preliminary plat, not the final plat, which establishes the legal rights.  I see preliminary levies the same way – by September 15 we really should have done all the work and the 4th quarter is proofreading and double-checking.  But here’s where are are:

Preliminary bottom lines

Housing and Redevelopment Agency (HRA) levy: $236,234.  This is the maximum allowable levy (based on .0185% of the taxable market value of property in Northfield) and a 9.3% increase over the current year levy.  Why the maximum?  The HRA has a steady record of accomplishment and is the only area of city government where adopted policy clearly drives action.  They’ve been very successful at leveraging tax dollars to qualify for grants, tax credits and other funding.  And, they’ve continually reported to the Council in a clear and complete manner.   In this economy, the HRA’s work has become even more critical for ensuring safe, affordable housing for Northfield and the way they do their work should be the model for the city.

Economic Development Authority (EDA) levy:  $221,384.  EDA levies are also capped by state law at .0183% of taxable market value.  We’ve usually set the EDA levy at or near the maximum allowable which would be $233,681 for 2012 (based on 2011 payable); the approved number is the maximum based on the 2012 payable taxes (the difference is part of the fallout from the Market Value Homestead Credit change).  Last year, I voted against the preliminary EDA levy, but caved on the final levy on the assurances that the Council would work on addressing concerns about the EDA.  And I’ve said a great deal to say about the EDA as it is currently configured and how it is currently performing (in 2011: July, April, February and January).  I voted no on the preliminary levy, but I’d love to be surprised before December by a clear EDA budget tied to the Comprehensive Economic Development Plan by December.

City Levy: $6,898,909.  This amount is an increase of $464,909 or 7.2% over the 2011 levy amount.  The number has two parts, the operating levy and the bonded debt levy.  Of the increase, $311,843 is for operations (5.8% increase over 2011); $153,066 is for bonded debt (14.2% over 2011 – total bonded debt levy for 2012 is $1,234,631). Consider, for a very rough forecast, that bonding for a new Safety Center (between $8 and $10 million dollars) will add somewhere in the neighborhood of $500,000 annually to the debt levy.

Now you may as well just read last year’s posts here and here.

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