Woodbury officials consider cuts to lower tax levy

Talk about it

Since Woodbury was put in the “losers” category in a metro wide reimbursement program, city officials were left to fill a hole in the budget in order to achieve a $0 tax increase on the average value home, or stay well below the preliminary maximum amount of $15 that was approved in September.

City Council held a workshop Wednesday, Oct. 24, where members discussed some options to fill the $396,000 gap, an amount that’s based on the most recent market value information.

The Metropolitan Fiscal Disparities program, which the city is obligated to participate in, attempts to address growing fiscal concerns in the seven county region.

Woodbury is required to contribute 40 percent of its growth in commercial tax base to the regional pool. The collection is then redistributed back based on market values compared to metro average.

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

Because of that, the city had budgeted for a small reimbursement from the program, however, it wasn’t small enough and Woodbury ended up losing hundreds of thousands of dollars out of the budget released in August.

Market value and tax capacity information from Washington County indicated that if the council sticks with the maximum preliminary levy of $29,073,861, the impact on the average value home would be $945, a $14 increase from last year.

But trying to lower it so it doesn’t have any additional impact from last year is where some cuts, or estimated revenue increases, could fill the gap.

Gridley presented some options to the council that include reducing workers compensation, increasing revenue from new commercial activity and housing unit construction, and reducing the capital equipment fund by moving it to the general fund.

A total of $220,632 in property tax levy cuts would result in a $6 tax increase on the average value home, versus the original $14.

Additional cuts to total about $396,000 would leave the impact at $0.

Council Member Amy Scoggins said she doesn’t think a $0 increase should be the target. She said she would make her decision based on what’s “necessary and what makes sense.”

Gridley said new housing construction permits have increased since May and a steady rise shows recovery and solid predictions.

But he added that it’s best to create a long-term plan that wouldn’t have any negative impacts in the future rather than basing the decision off of numbers released in one year.

“It’s like a savings account, you can’t capture it all at once,” Gridley said.

Staff predicts an increase in housing and commercial activity that would add about $150,000 in revenues next year.

“Phase 2 will be able to launch off well,” Gridley said. “There will be developers, there will be buyers.”

The council received the information a month ahead of its November workshop where members will once again discuss the changes before certifying the final levy in December.

Gridley recommended staying with the original levy amount of $29 million without making any cuts because Woodbury is a growing city, he said.

But council members were not required to make any decisions at the workshop and agreed to think it over before they have to vote on the levy at the end of the year.

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