Cliff Buchan
News Editor

Residents of the new city of Scandia can expect to pay higher property taxes under a preliminary tax levy plan approved last week.

Meeting in special session on Tuesday, Sept. 11, the Scandia City Council approved the preliminary 2008 tax levy, increasing the total city property tax levy by a maximum of 11.06 percent from 2007 to 2008 (from $1,533,930 to $1,703,589.)

The final levy amount will be determined in December, after the Monday, Dec. 3 Truth in Taxation public hearing and the Tuesday, Dec. 18 budget adoption hearing, at which citizens are invited to comment on the proposed property tax levy.

The city’s operating budget is expected to increase by 2.02 percent from 2007 to 2008.

Inflation factor

City Administrator Anne Hurlburt said the increase is less than the rate of inflation, even as some costs are increasing faster.

For example, the police services contract with Washington County will increase by 12.02 percent, she said. Health insurance costs will go up 17.6 percent.

The tax increase is more than the operating budget increase because other revenues (interest, permit fees, state aid) are down she added. Also, a large part of Scandia’s resources are spent on road paving projects, including debt service.

The 6 percent growth in taxable property value from 2007 to 2008 absorbs some of the levy increase, so the tax rate would increase at a slower rate than the levy (4.67 percent), the administrator said.

The proposed 2008 tax rate of 25.116 percent is less than the New Scandia Township tax rates for 2005 (28.036 percent) and 2006 (26.551 percent.) City property taxes on the average value home in Scandia ($391,700 in 2008) would increase by a maximum of 6.15 percent ($56.61.)

Part (about one-fourth) of this increase is due to an increase in the average home value, which was $387,000 in 2007, she said.

Scandia has consistently ranked low for municipal property tax burden compared to other Metropolitan Area communities, Hurlburt said.

In 2006, Scandia ranked 82nd among 113 cities and towns above 2300 population.

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