Woodbury a ‘loser’ in fiscal disparities program

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After leaning more toward a zero dollar increase on average home taxes for 2013, the Woodbury City Council received some news that may change their final decision.

The council agreed in August to a proposed levy amount of $29 million, a zero increase on the average home value and a 3.22 percent above the 2012 property tax levy.

City Administrator Clint Gridley said after estimating the city would receive 7 percent of its contribution to the Metropolitan Fiscal Disparities program, it will actually see it reduced by $418,854.

The program, which was implemented in 1975, was an attempt to address growing fiscal concerns in the seven-county metro region.

The law requires all cities to contribute 40 percent of the growth in their commercial tax base to a regional pool. The collection is redistributed back based on market values compared to metro average.

Communities with high market value per capita, like Woodbury, are “losers” because they end up receiving a smaller share, Gridley said.

Last year, the city had a large increase of 17 percent. So this year city officials budgeted for a 7 percent increase, which they thought was on the conservative side.

“However, as feared, it seems the 2012 number was overshot and now some of the increase is being retracted,” Gridley said in a council report.

City Council voted 3-1 to adopt a maximum levy amount of $29,073,861. But with the change in fiscal disparities, it would add $15 in taxes to the average home.

However, council members will further discuss the question at an Oct. 17 workshop, where they could potentially reduce the amount before the Truth-in-Taxation hearing in December.

City staff had recommended another option that would reduce the levy by the full amount of $418,854 to keep the impact to the average value home at zero.

Council Member Christopher Burns said he wasn’t in favor of any option that would increase taxes.

“I don’t think now is the time to raise taxes on our residents,” he said, adding that the city has reserves to tap into when needed.

Council Member Julie Ohs said she voted for the maximum increase because she wanted to further consider it at the next council workshop after receiving final property value numbers from Washington County.

Tags: news, government, woodbury, taxes