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Duluth City Council to consider smaller levy hike for 2023

A pair of proposed amendments could trim the anticipated increase in the city property tax levy by 1-2% next year.

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Duluth City Hall
2017 File / Duluth News Tribune
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DULUTH — Concerns over rising property taxes have at least a couple city councilors looking to shrink the proposed size of the local levy next year.

On Monday night, the Duluth City Council will consider two competing amendments that could ratchet down the size of the tax hike local residents and businesses are likely to face in 2023, although it remains unclear exactly where subsequently needed cuts would occur.

In late September, councilors approved up to an 8.9% increase in the city’s share of property taxes. Now, some are having second thoughts about the city’s proposal to collect $41.7 million through its levy next year

An amendment that would trim that tax bump by 2% — or $765,901 — has been introduced by 3rd District City Councilor Roz Randorf.

And a more modest proposal to cut the proposed levy increase by 1% — or $382,950 — has been brought forward by Council Vice President and 5th District Councilor Janet Kennedy.

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“This is really a tough time for all of us, and we’re all having to tighten our belts,” Kennedy said. “We have really heard from constituents that the taxation this year is really over the top for them. They can’t afford it. So, it’s my role as a councilor to listen to that and find something to do to help them, to let them know that we’re working hard and that we hear them.”

Janet Kennedy
Janet Kennedy

Kennedy proposes to cover the costs of her proposal to limit the levy hike to 8.9% through a mix of yet-undisclosed budget cuts and the use of additional federal COVID-relief funds the city received through American Rescue Plan.

At a council agenda session meeting Thursday, Randorf said she proposes to make permanent reductions in city spending rather than relying on COVID-relief funds to temporarily buy down the levy.

“The 2% reduction is really a reduction in the size of our overall expenditures as a city, which would then next year result in a reduction, not an increase in the levy,” she said.

Roz Randorf headshot
Roz Randorf

“So, one is a temporary reduction, and the other one is making our expenses smaller so that the burden is less next year. So, really that’s what we’re talking about with these two options,” Randorf said, describing the lesser 6.9% growth of the levy that would happen under her proposal.

Kennedy interjected with a clarification, saying: “Mine has them both. Mine is partially temporary, and then the other expenditure reductions would be permanent. So, it’s half-and-half.”

Property tax concerns are prompting a closer look at a doubling of the Duluth Transit Authority's funding request.

Neither proposal was warmly received by city administration, and Chief Administrative Officer Noah Schuchman said he opposed both at Thursday night’s meeting.

“I have concerns about both, and I will talk those through on Monday. But more specifically, the 2% reduction is one that would significantly impact city operations. So, that is the one I have the most concerns about, and in the spirit of this evening, I will hold the rest of my comments until Monday,” he said.

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School Board members are set to finalize a 2023 tax levy that could be as large as $43.95 million.

City Finance Director Jennifer Carlson said either levy amendment also would necessitate commensurate changes in an ordinance setting the budget for the coming fiscal year and appropriating funds to different city operations. That ordinance also will be coming to the council for a first reading Monday night, along with the ordinance establishing the size of the city levy. The ordinances will require a second reading at a subsequent meeting before they can go to a vote.

Peter Passi covers city government for the Duluth News Tribune. He joined the paper in April 2000, initially as a business reporter but has worked a number of beats through the years.
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