The Duluth City Council set the upper limit of what it can levy during the coming tax year at a meeting Monday night.
It not only approved a 1.6 percent increase proposed by city administration but an additional 1.22 percent bump proposed by Councilor Jennifer Julsrud. The combined effect could be an increase of 2.82 percent and will yield an increase equivalent to $12.20 for the owner of an average-value $158,500 home in Duluth.
But the council won't actually set its final budget until December.
Julsrud's additional tax authorization would boost the city's budget by $230,000 next year to pay for two new positions and cover expenses as the city boosts its efforts to bring more development and jobs to the community.
Of that sum, $90,000 would go to hire an additional staff person in the planning department. The remaining $140,000 would go to pay for another business development position and to step up the city's marketing and recruiting efforts as it works to boost local employment.
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"We need to make an investment in economic development," Julsrud said.
She pointed out that when Georgia-Pacific recently closed its hardboard plant in Duluth, it cost the city not only 141 good-paying jobs but more than $100,000 per year of payments made in lieu of taxes. Julsrud also noted that the plant was one of the largest customers of the city-run gas utility, spending $1.3 million per year. Julsrud said the loss of that volume is likely to affect rate payers throughout the system.
"One thing I hear all the time is that we don't have enough jobs in Duluth," said Councilor Linda Krug, throwing her support behind the plan
While Councilor Jim Stauber said he supports providing increased business development and planning resources, he said he would not support increasing the levy. He suggested the council look to cut expenses elsewhere and channel the savings to those departments instead.
Councilor Sharla Gardner questioned the council's priorities at a time when the city has struggled to provide basic services.
"I don't want to even consider increasing the levy for economic developers in the same year we closed a fire hall. It just doesn't make sense," she said.
Council President Dan Hartman noted that Duluth has just two business developers on staff, whereas cities of comparable size have seven to 10 people working in that role. He noted that back during Mayor John Fedo's administration, the city had 10 people working in business development.
Councilor Patrick Boyle said he was supportive of the idea of increasing the levy limit at this point but said his eventual support for boosting the budget in these areas will depend largely on what kind of aid Duluth receives from the Minnesota Legislature next session.
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The council voted 5-4 to support the additional funding Julsrud proposed.
Voting in the majority were councilors Julsrud, Krug, Hartman, Boyle and Emily Larson.
Voting in the minority were councilors Gardner, Stauber, Jay Fosle and Garry Krause.
