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Budget planners seek to keep increase down

The St. Louis County Board will be asked Tuesday to approve a maximum increase of 4.27 percent in the county's 2008 property tax levy. "Commissioners have asked that we hold the line on property tax increases," said St. Louis County Administrator...

The St. Louis County Board will be asked Tuesday to approve a maximum increase of 4.27 percent in the county's 2008 property tax levy.

"Commissioners have asked that we hold the line on property tax increases," said St. Louis County Administrator Dana Frey. "We had some things break well for us this year and some other things that didn't break well, but we came in with a pretty tight levy."

If approved, 4.27 percent would be the maximum the board could increase 2008 property taxes over 2007 rates.

Last year the board adopted a maximum levy increase of 8.42 percent for 2007.

A 4.27 percent increase in 2008 would raise about $101.6 million from property owners within the county, according to Frey. In 2007, the levy raised about $97.4 million.

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"Overall, I think you are going to find that we are going to be the lowest in the region, if not the state," said Commissioner Steve Raukar, chairman of the county's budget and finance committee. "I think it's a reasonable budget that's not going to be received in anger. In some cases, I think the county portion of people's property tax statements will be flat."

The county's overall 2008 budget is expected to be about $326.8 million, according to Frey. That compares with a $313.4 million budget in 2007.

Increased corrections costs and a reduction in timber sales revenue because of a sagging forest products industry are projected to have significant effects on the budget, Frey said.

However, a 2.3 percent increase in the county's overall tax base -- some of it from the construction of new lake homes -- would help offset the 4.27 percent increase, he said.

"The new construction acts to reduce the effect of the property tax increase," Frey said.

With the increased tax base, taxes on existing property on the average would rise less than 2 percent, Frey said.

Raukar said if the Legislature and Gov. Tim Pawlenty had reached agreement on a tax bill during the 2007 legislative session, the county property tax levy could have been even lower with restoration of local government aid.

The county's maximum property tax levy must be certified by the county auditor on or before Sept. 15.

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Commissioners have until Dec. 11 to finalize the levy.

"We're going to continue meeting to scrutinize the numbers to see if we can bring it down further by identifying cost savings or additional revenue," Raukar said. "Our people are getting squeezed in a lot of areas such as fuel and energy, so we are trying to give them breathing room from all the inflation."

The budget includes some savings from employee retirements, Frey said.

An additional $1.8 million appropriation to improve county roads -- the same amount as approved for 2007 -- will be included in the 2008 budget.

The county tax levy is only one portion of a property owner's tax statement. State, local, school and special taxing district assessments are also part of the statements.

Because St. Louis County's maximum proposed levy is below a 4.28 percent threshold established by the state, the county would not be required to hold Truth in Taxation hearings.

In recent years, the hearings have been sparsely attended.

LEE BLOOMQUIST can be reached weekdays at (800) 368-2506, (218) 744-2354 or by e-mail at lbloomquist@duluthnews.com .

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