Austin residents could see tax increase

Published 7:35 am Wednesday, December 8, 2010

Austin residents could see their taxes increase by about two dollars each month in 2011 if City Council approves the proposed tax levy and budget for next year.

Tom Dankert, director of administrative services for the city, outlined the levy and budget at the state-required Truth-in-Taxation meeting Tuesday night.

The city is proposing an overall tax levy increase of 6 percent, which would break down to an average tax increase of about $24 for Austin residents for the whole year. This tax increase is solely based on the city levy and budget, though. Further increases depend on the county and school levies. Dankert said some residents could actually see a decrease in their yearly taxes.

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Overall, the city’s entire budget comes in just under $30 million. Over 52 percent of the general fund, which is budgeted at $14.8 million, is accounted for by Local Government Aid (LGA). However, if the State Legislature cuts LGA during the coming legislative session, Austin’s budget could face a major roadblock.

“Any hiccups by the state of Minnesota can cause major problems for the City of Austin,” Dankert said during his presentation. “The state of Minnesota’s (budget) imbalance … will more than likely alter the city’s plan for 2011.”

Hypothetically, if LGA is taken away completely, the city would need to approve a tax levy triple that of last year’s $3.9 million “in order to operate in the capacity we do now,” Dankert said. However, it is unlikely that LGA would be totally eliminated during the next legislative session.

Dankert said the State Legislature or governor can unallot LGA funds or change the formula by which LGA is figured during the coming legislative session, meaning Austin could still receive less funding even though the current LGA figures have been certified since Aug. 1, 2010.

If the tax levy is approved, which would happen during City Council’s next meeting Dec. 20, it would be the eighth straight year the city’s levy has increased.