The Brainerd City Council Thursday set its preliminary 2005 tax levy 2 percent higher than in 2004.
In a 6-1 vote during a special budget meeting, the council set the preliminary tax levy at $2,850,414, an increase of $350,000 from 2004. Under the preliminary levy, the tax rate would increase from 41.90 in 2004 to 42.740 in 2005.
The preliminary levy set by the council can be lowered at a later date, but cannot be raised. The city could operate with a total increase of just more than $600,000 from 2004, including $250,000 in restored local government aid and an increase in property values.
If adopted at the proposed preliminary tax levy level, the city-portion of property taxes would increase from $251 in 2004 to $256 in 2005 on a $60,000 home; from $335 to $342 on a $80,000 home; from $419 to $427 on a $100,000 home; and from $629 to $641 on a $150,000 home.
Voting against was council member Bob Olson, who said he could have supported a 1 percent increase, as was earlier proposed by council member Mary Koep.
"I would rather see us have a flat levy, to use the same levy as we did in 2004," said Olson, pointing to the fact that even with no change in the levy a Brainerd resident's property taxes would still increase because of an increase in the city's market value.
Koep said she could support a 2 percent increase because it is just $50,000 more than in 2004.
"I think we can live within this, we can prosper and flourish within the city," Koep said. "I think this is reasonable."
Council member Lucy Nesheim asked Dan Vogt, city administrator, if the 2 percent increase was sufficient for the city to continue to provide services, to which Vogt said it was. The council directed Vogt to meet with city department heads and supervisors to make the appropriate budget cuts to come up with a balanced budget within the 2 percent increase.
In a change from previous years, Vogt presented a budget that included all department requests. That would have resulted in a levy increase of $775,000, or 19.25 percent, and a tax rate increase from 41.9 percent to 49.967 percent. Vogt said he wanted the council to make the decision.
"That's why you're elected. Our department heads provided information to you based on what they felt they needed in their departments," Vogt said. "Can they live with less? I think they can ... It will be a difficult situation, but we will do what we have done every year since I've been here."
The council set its taxation hearing for 7 p.m. Dec. 13.
MATT ERICKSON can be reached at email@example.com or 855-5857.
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