The Duluth City Council voted 5-4 Monday to leave the door open for a bigger property tax hike than Mayor Don Ness’ administration had proposed.
Ness is seeking to increase the city’s local property tax revenues by 2.2 percent in 2015. Due to the growing value of Duluth’s property base, this would necessitate an increase in city property tax of 1.6 percent.
But Councilors Zack Filipovich and Joel Sipress put forward a proposal to boost local property tax revenues by as much as 3.5 percent, supported by up to a 2.9 percent jump in the city tax rate.
For the owner of a typical $150,000 home, the council proposal could raise city property taxes by about $15 more next year, as compared with a $9 increase under the mayor’s plan.
Sipress praised the mayor’s proposal, calling it “a very cautious and thoughtful budget” given the difficult economic times from which the city is emerging. But he added: “What this amendment is designed to do is to propose a minor modification in the proposed levy that would allow us as a council to discuss two prescient issues. The amendment proposes an additional $250,000 of levy be considered. Of that, $30,000 could be considered as a potential part of the funding model for a housing access center.”
This center would help to mediate problems between tenants and landlords, as well as serving as a clearinghouse for information about available rental properties. Duluth had such a center until 2009, when funding difficulties led to its closure.
Jeff Corey, executive director of One Roof Housing, said the center could help prevent evictions that lead to homelessness.
“It provides an opportunity to help everyone behave a little better and to understand their rights and responsibilities on the housing front,” Corey said.
However, Sipress called for the vast majority of the additional levy revenues to be used to begin ratcheting down a monthly street light fee charged to local residents and property owners. He referred to flat fees as “an unfair inappropriate way to fund basic city services like street lights.”
“This amendment and the $220,000 that would be used to fund a 10 percent reduction in the street light fee would represent a beginning, a start, a step toward responsibly bringing down the street light fee over a number of years a little bit at a time,” Sipress said.
For residential property owners, the proposed street light fee reduction would amount to a savings of about 50 cents per month or $6 per year.
Earlier this spring, a divided city council voted 5-4 to put an end to the street light fee by the beginning of 2019.
“Having voted to terminate it, we do believe it is responsible for us to begin working to gradually bring it down, so as not to put future councils and administrations in the situation of holding the financial bag for decisions that we made,” Sipress said.
Although Councilor Emily Larson had not voted in support of eliminating the street light fee earlier, saying that it seemed irresponsible to do so without a plan for how to pay for basic services, she said she would be willing to support the amended levy proposal if it did not specifically earmark the funds.
Both Sipress and Filipovich agreed to remove this language from their resolution, and the measure passed.
Voting for the resolution, as amended, were Councilors Sipress, Filipovich, Larson, Barb Russ and Sharla Gardner.
Voting against it were Councilors Linda Krug, Jennifer Julsrud, Jay Fosle and Howie Hanson.
While the measure could allow for a higher levy than Ness’ administration proposed, the council won’t take final action on property taxes until December.
“This amendment allows us to have a discussion and a community conversation,” Filipovich said.
David Montgomery, Duluth’s chief administrative officer, acknowledged the council’s right to shape the levy, but warned it would take a much more substantial move - an 11.1 percent hike - to replace the street light fee.
