State aid fails to keep up with cost of living, city says; Austin holds hearing on 11.23% property tax increase

Published 8:57 am Friday, December 8, 2017

The city held its annual Truth and Taxation hearing Tuesday evening. The tax levy and budget for 2018 were discussed during the public hearing to inform the citizens of Austin as to how their tax money will be spent next year. Minnesota law requires the hearing.

The council set the proposed tax levy increase of 11.23 percent back in September; however, the budget discussion began in April. Under Minnesota law, once the tax levy was set, the council could lower it, but not raise it. Under the new rate, homes valued at $100,000 will see property tax increases of $30-$40 in 2018. This will provide a total of $5,941,000 to the city’s budget, up from $5,341,000 from 2017.

The tax levy in Austin has gradually increased every year since 2014. Director of Administrative Services Tom Dankert said this is because increases in Local Government Aid (LGA) have not been enough to offset the cost of living increases, which it used to do several years ago.

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The majority of money collected from the tax levy, more than $3.4 million, will be contributed to the general fund. Over $1.4 million will be put into the capital improvements revolving fund, and $968,916 will be put toward the library fund. The debt service fund and Port Authority fund will receive the rest, receiving $97,759 and $40,000 respectively. With the exception of the Port Authority, all components will be receiving an increase.

The general fund expenditures were also explained during the hearing. The funds are broken down into six categories: general administration, public safety, streets and highways, parks and recreation, economic development, and capital outlay/other. Public safety, streets and highways, and parks and recreation are the top three categories to receive general fund expenditures, receiving $6.7 million, $3.8 million, and $2.8 million respectively.

The city will also be using some funds to create a new building maintenance position. This will be the only new city position created for 2018.

Based on property tax rates received from Mower County Finance Director Donna Welsh, city of Austin residents pay 39 percent of taxes toward the city, 38 percent go toward the county, 21 percent goes toward the school district, and two percent goes toward other expenses.

The City Council will vote on adopting the tax levy and budget amounts for the payable 2018 year during its next regular meeting on Monday, Dec. 18. The city will then certify the 2018 tax levy to Mower County and the state of Minnesota on Dec. 19.

For more detailed information about the 2018 proposed tax levy and operating budget, visit