Valuation drops lead to mild tax savings
No surprises came out of the City of Forest Lake’s budget hearing on Monday. The City Council adopted a 2013 budget with little changes from its preliminary version drafted in September.
The budget calls for general fund revenues of $8,761,659 and expenditures of $8,816,659. Wages and benefits make up 66.4 percent of budgeted expenditures.
The finalized property tax levy for next year will drop from the payable 2012 levy by $2,627 (0.04 percent), to $7,163,901.
Though several cost-cutting moves contributed to the stabilization, a significant factor was the removal of $230,000 in street overlay funds. This amount will be rendered unnecessary following final approval of a franchise fee on utility bills that will finance street improvements (See separate article in this edition).
Other factors preventing a levy increase include the streamlining of the building and inspections departments and the recent switch in engineering firms.
Due to an estimated 12.1-percent decrease in market value for homes, most residents will see a notable drop in city taxes next year. The decrease is estimated at $15 for homes valued at $100,000, at $12 for homes valued at $150,000, and at $10 for homes valued at the average amount, $178,900. Due to the market value exclusion, the estimated savings will drop to just $6 for homes valued at $250,000 and homes valued at $400,000 will see an increase of about $17 in taxes.
The flat tax levy comes despite a tough economy. With market corrections taking place in the housing arena, the city’s taxable market value and total tax capacity are projected to fall by 13 and 12 percent, respectively, for taxes payable in 2013.
City Administrator Aaron Parrish said there is reason to hope that the those numbers have bottomed out.
“On a positive note, our preliminary indication back from Washington County based on next year’s assessment is looking positive and it looks like it will increase,” he said. “Hopefully, like many communities have experienced, that will be our tapering off point, then we’ll be proceeding upward.”