It seems most property owners can expect a moderate increase to their local property taxes in 2018.
Local cities, schools and other governmental bodies are required to set their preliminary budgets and maximum tax levies — revenue collected from property taxes — by the end of September.
In most cases, that means property owners now know the maximum levy they can expect from each governmental entity. The levy amounts can decrease between September and the final truth and taxation hearings in December, but cannot increase. The exception to that rule is school districts, because the state dictates the maximum levy amount and can change that amount after September.
In addition, all governments are not created equal. The various governmental bodies are accorded a different percentage of a taxpayer's property tax dollars, different sized slices of the pie.
For example, Cloquet residents pay approximately 43 percent of their tax dollars to Carlton County, 25 percent to the Cloquet School District, 22 percent to the city of Cloquet and 10 percent to the Cloquet Area Fire District.
Following is a brief roundup how some of the larger local budgets and tax levies are stacking up for 2018.
The Carlton County proposed budget for 2018 increased slightly.
The proposed 2018 budget is $58,088,823, up from $55,895,611 in 2017. The expected 2018 budgeted revenues are $30,861,454 with the levy balance coming in at $26,743,763. The money needed to cover the difference between the expenditures and levy will come out of reserves at a cost of $483,606.
District 4 Carlton County Commissioner Susan Zmyslony cautioned her fellow commissioners that the budget is still not finished and there could be a few more changes in the coming months.
The biggest changes for 2018 is cost of living adjustment (COLA) increases and health coverage for county employees. The COLA increase will be about 3 percent.
County Assessor Paul Gassert stressed that not all of the contracts have been finalized yet.
"Other than that, there's nothing of significance," said Gassert.
Public Health and Human Services is the largest budget expenditure for the county with $20,601,899 forecasted in 2018 and a levy of $7,641,051 for the county's share of the HHS budget.
Roads and bridges is the next largest department with a budget of $11,565,658 for 2018. The levy portion of their budget amounts to $2,859,195.
Other higher cost budget expenditures include general operations at $3,372,171, which is a catchall for miscellaneous departments, and county sheriff at $3,034,631.
"For example, most, if not all of the utility and building related expenses, health and liability insurances, fleet vehicle expenses and general office supplies [come from the general operations budget]," said Gassert.
The community corrections department runs the probation offices and Arrowhead Regional Corrections, and came in with a proposed budget of $1,949,803, all of which would come from the levy. The airport commission's budget is set for $1,957,164, most of which they expect to make in revenues, leaving $76,561 to be covered by the levy.
The jail's proposed budget for 2018 is $1,843,583 and the county attorney's office budget is $1,046,354. The communications department is the sheriff's 911, which has a budget of $1,015,538 in 2018.
The Animal Control at Friends of Animals Humane Society requested one-time extra funding on top of the usual $30,000 for 2018 — that $20,000 is coming out of reserves and not additional levy money.
The Transfer Station's proposed 2018 budget is $1,446,528 but they expect to make $1,452,500, making them one of the few departments to pay for themselves and make a little extra.
The public truth in taxation hearing on the budget and proposed tax levy is scheduled for 6 p.m. Tuesday, Dec. 5, at the Carlton County Transportation Building.
CLOQUET SCHOOL DISTRICT
On Monday, Cloquet School Board members approved the "maximum" levy increase for 2018. District Finance Director Candace Nelis said right now that maximum increase is set at about 4.38 percent, but that could change before December.
"I'm asking that the board certify the maximum increase in case any more adjustments come through," Nelis told the board, which voted unanimously to do so. Superintendent Ken Scarbrough explained the certification form didn't name the maximum levy limitation or proposed levy amounts in case the state changes those numbers before December. However, according to the most recent Minnesota Department of Education levy limitation report, the current maximum proposed levy total (there are several different funds) sits at just over $6.5 million.
Levy dollars from local property taxes make up approximately 17 percent of the school district's total revenue, with almost 68 percent coming from state sources, 5 percent coming from federal sources and another 10 percent coming from other local sources.
In June, the board approved a preliminary 2017-18 fiscal year budget that — worst case scenario — spent $1.6 million more than the district expected in revenues.
Nelis said then that she expects to better know the actual difference between revenue and expenditures in December or early January. The district is very conservative in its enrollment estimates each year, she explained, which matters because much of the state funding for school districts is tied to enrollment.
On Monday, Scarbrough said enrollment is currently at 2,575 students, 107 more students than the district had at the finish of the previous school year.
"That number is still fluid though," Scarbrough said.
Nelis said the biggest changes include a general fund increase of $197,787 because of the additional $100 per pupil unit for long-term facility maintenance and an additional $107,346 in the Community Service fund, which was increased to reflect actual expenses for extended-day disability care for school-aged participants.
The public truth in taxation hearing on the budget and proposed tax levy is scheduled for 6 p.m. Monday, Dec. 11, at the Board Room in the Garfield School at the corner of 14th Street and Carlton Avenue.
CITY OF CLOQUET
Cloquet City Councilors approved a tax levy increase for 2018, but taxes could actually decrease for some property owners in the city.
On Sept. 12, the council unanimously approved the 2018 property tax levy at $3,085,000, an increase of 3.87 percent over last year.
On the bright side, city finance director Nancy Klassen explained that the city's tax capacity is estimated to increase 4.1 percent so property owners whose homes did not increase in value may actually see a decrease in the city portion of their taxes next year.
Councilors also approved the city's preliminary budget for 2018 on Sept. 12. The city is proposing total expenditures of $27,184,950 — up from $21,267,720 in 2016. Expected total revenues are $23,697,900, which means spending is set to outpace revenues by nearly $3.5 million.
According to the staff report, the difference is mostly due to capital improvement projects, which are being paid for by local option sales tax dollars.
The general fund, which pays for most of the city services, has an estimated $5,645,750 in expenses for 2017 and incoming revenues of $5,650,350, a 3.28 increase over last year.
According to the staff report, some key budget considerations for next year include the following:
• A 5.2 percent increase in healthcare premiums;
• An increase in Local Government Aid of $100,000; and
• Proposed building/remodeling projects for the Cloquet Police Department and Public Works buildings that were moved one year out to facilitate the Cloquet Area Fire District's new building project in 2018.
Also, city staff are working to reallocate the $5.8 million of local option sales tax money set aside for infrastructure improvements for a new commercial development near Interstate 35 and Highway 33 that failed to materialize.
The public truth in taxation hearing for the adoption of the 2018 budget and property tax levy is set for 7 p.m. Tuesday, Dec. 5, at Cloquet City Hall on the corner of Cloquet Avenue and 14th Street.