For the first time in five years, Little Falls Council can look at a 0 percent increase in levy

By Terry Lehrke, News Editor

Due in part to the Minnesota Legislature’s vote to increase local government aid (LGA) to cities, Little Falls residents may see no increase, and maybe even a decrease, in the city portion of their property tax levy for 2014.

During its work session Monday night, Little Falls City Finance Officer Lori Kasella told the Council staff was putting together the budget for 2014.

In it is included an additional $346,000 in LGA, allowing staff to offer the Council a 0 percent increase option for the 2014 property tax levy.

The city’s preliminary property tax levy must be certified to the county by Sept. 15. The Council will hear the budget and levy proposals at its Sept. 3 meeting, at which time it must make a decision.

Kasella said since the preliminary levy can be reduced further (but not increased) after it has been certified to the county Sept. 15, staff will work on the budget until the final certification in December. The goal is to reduce the levy even further during that time, she said.

In 2008, the Council was able to decrease the property tax levy by .54 percent, also because of an increase in LGA. Since that time, LGA has been cut by the state and residents have seen only increases in their city property tax levies.

LGA makes up nearly half of the revenue in the city’s general fund budget, said Kasella. Last year, the general fund budget was $4.3 million and LGA was $2.1 million.

The city’s debt levy is not affected by LGA, because when the city enters into the debt in the form of bonds, it uses special assessments or other resources such as water and sewer revenues, depending upon the type of bond, said Kasella.

“When we issue bonds and do it over 15-year time period, we know what our levy needs are going to be for next 15 years, and we can’t change that,” said Kasella.