Politics & Government

Inver Grove Heights City Officials Approve Reduced 2012 Levy

The Inver Grove Heights City Council voted to reduce the levy by roughly $674,000 in 2012, but thanks to the Market Value Exclusion program, many may see a tax increase.

With an economic rebound still out of sight, Inver Grove Heights City Councilor Rosemary Piekarski Krech opined on Monday, the only responsible choice to make is a reduction in the tax levy.

That is exactly what the Inver Grove Heights City Council did during its annual Truth in Taxation hearing on Monday night. After months of budget wrangling, the council unanimously voted to reduce the city's total tax levy from $15,475,796 in 2011 to $14,801,688 in 2012—a reduction of roughly $674,000.

Council members also approved a .2 percent general fund budget reduction in 2012—drawing the budget down from $17,826,900 in 2011 to $17,798,300 in 2012.

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The council's decisions on Monday mark the culmination of months of intensive budget negotiations that began in September when the city approved its preliminary 2012 levy. At several points this fall, the budget talks turned contentious, as position. City officials eventually included the position in the 2012 budget, but have not yet restarted the hiring process for the job.

The assistant fire chief isn't the only open position included in the 2012 budget—city officials have also budgeted for the hiring of two new police officers and a public works employee. Each of those positions were budgeted for in 2011, but never hired, City Administrator Joe Lynch said.

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To help cover the cost of general operations, the council approved a $500,000 transfer from the —money Inver Grove Heights receives for hosting several landfills within city limits. To help make ends meet this year, city officials also opted to draw down the city's general fund reserves.

Tax Increase?

Despite all the reductions, Inver Grove Heights residents may still see a property tax increase this year, thanks to the implementation of the state's Market Value Exclusion program.

The program, which replaced the state's Market Value Homestead Credit this year, effectively excludes a portion of certain properties from the city's taxable market value, shrinking the city's tax base. In order to bring in the same amount of tax dollars as before, city officials had to increase the tax rates for all property in the community. In 2011, the city's tax rate was .43169, but in 2012, that rate will increase to .44727. Without the implementation of exclusion program, Inver Grove Heights' tax rate in 2012 would have been .42381, city officials noted in their budget presentation.

“We could’ve lowered our rate, had we not lost properties that we could have taxed," Lynch said during the meeting.

Several members of the public commended the council for reducing the 2012 levy and budget, but encouraged officials to look at additional cuts in the future.

"From my perspective it was good that we tightened our belts as much as we did," Inver Grove Heights resident Steve Wilson said. "I’d just like to see more."


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