Council to vote on final levy in December
In September, the City Council approved a preliminary 2021 property tax levy of $67,924,356. The preliminary tax levy can be reduced, but not increased, before final adoption in December. This levy funds 69.4% of the City’s General Fund budget. The remainder of the General Fund budget is supported by lodging and admission taxes, license and permit fees, grants and program revenues. The preliminary levy reflects a 5% increase over the 2020 levy.
The Community Budget Advisory Committee (CBAC) will present budget proposals to the City Council that include varying levels and types of service reductions.
The City Council will hold a virtual public budget hearing on Monday, December 7, at 7 p.m., via WebEx video conference. Residents will be able to call in and participate. For instructions, visit blm.mn/cc-1207.
Your City property tax dollar
Most property taxes support core services, including police, fire, public works, and parks and recreation, see graph upper right. For every dollar of City taxes paid, 38 cents goes toward Police and Fire, 16 cents goes toward Public Works and 14 cents goes toward Parks and Recreation while 8 cents of each City property tax dollar pays outstanding debt service. Debt is issued to fund street and infrastructure work and construction projects.
Impact of COVID-19 on the City’s budget
The pandemic has created a larger economic downturn for the City than 2008’s Great Recession. Many industries have come to a halt, including the hospitality and entertainment industries. For the City, that means millions of dollars lost in lodging and admissions taxes, mostly paid by visitors, not residents.
Lodging and admission tax revenues usually generate about 13% of the City’s general fund revenues. Due to the pandemic, these revenues have declined by more than $5 million, to less than half what was collected before COVID-19.
Steps taken to control costs
The City is working hard to respond to this ongoing loss of revenue, while still providing core public services. The City expects to balance the 2021 budget by controlling personnel costs and reducing staff positions, drawing down fund reserves where available, carefully analyzing City services for possible reductions, and analyzing lower interest rates to borrow for projects instead of paying cash.
Engaging the community
To ensure budget discussions reflected community preferences, the City Council appointed nine residents with knowledge of municipal budgets to the Community Budget Advisory Committee in May. Since then, CBAC studied the City’s budget and services, and hosted numerous community engagement initiatives to provide the City Council with recommendations for balancing the budget.
For detailed information, including staff presentations, summaries of community input and minutes of CBAC meetings, visit blm.mn/cbac.