City Council took a step forward with the budget process Monday night, leaving final approval as the next big step in September.

The council spent a good chunk of time on Monday going through a list of local outside agencies, such as the Welcome Center and the community band, and determining what funding levels should be for 2011.

When the dust settled, council was able to trim spending by roughly $1,500 versus last year — a small amount, but potentially quite important during a time when every dollar available to municipal governments in Minnesota is at a premium.

However, even trimming a relatively small amount wasn’t easy, as council members debated the merits of one entity versus the next. The community band, for instance, requested $2,500 from the city after receiving about $2,000 last year. On Monday, council proposed they instead get $1,000 — a notion that didn’t sit well with councilman Steve King, who said he didn’t like to see things like the band “nickled and dimed” away.

However, unless council votes to change their minds, these agency allocations — along with a 6 percent tax levy increase and a wage freeze for city employees — will become official on Sept. 7, which is the council’s next meeting date.

And though the council could decide to change how they allocate funds to certain agencies through next year, the levy has more stringent guidelines — after Sept. 15, it can only be decreased.

As it is proposed now, the 6 percent tax hike would net Austin an additional $234,000 in tax revenue.

Spread out, that means $10 to $20 more for homeowners living in median-value homes, which in Austin is roughly $102,000. It also means the city would take in $4.13 million in taxes overall.

However, even if a 6 percent increase is passed, Austin would still figure to have relatively low taxes — currently, the city ranks 222nd out of 224 Minnesota cities in net tax levy per capita, according to state figures.

While the city is looking to take in a little more via taxes, it is also potentially looking at more money from Local Government Aid, a state program that sends funds to many areas in outstate Minnesota. The 2011 proposal estimates that roughly $7.8 million will come Austin’s way, a nearly $700,000 increase over 2010.

However, with the state facing a $6 billion deficit, there is no guarantee that funds aren’t slashed, and city financial director Tom Dankert said in an e-mail he wasn’t “real confident” the additional aid would come.