Two Harbors proposes 12 percent levy increase
Where do your property tax dollars go in Two Harbors?
City Finance Director Miranda Pietila presented the City Council and public with information on the 2019 proposed budget and levy at the truth in taxation hearing Tuesday, Dec. 4.
The proposed property tax levy increase is 12 percent, which will generate $220,816.
If a home has a market value of $125,600 — the average for Two Harbors residents — it would have an 8 percent increase of $47.
If a home is valued at $275,200, that's a 4 percent increase of $32.
If a home is valued at $398,300, that's a 4 percent increase of $106.
The funds from the property tax levy are dedicated to the city's general fund.
For 2019, the total general fund revenues total $4.53 million, a 5.2 percent increase for 2019.
The expenditures total $4,722,803. Property taxes make up 45 percent of the general fund revenues, with local government aid generating about 36 percent.
However, LGA doesn't increase very much. It increased about 0.3 percent, or $4,830, from 2018. This drives the need for a property tax levy increase.
Where do general fund expenditures go?
The largest departments are Public Works and Public Safety, which make up 30 percent and 29 percent of the total general fund expenditure, respectively. Public Works includes maintenance of city streets and Public Safety includes the police and fire departments.
The third-largest section, which makes up 26 percent of the general fund, goes to transfers to other accounts to support the library, airport, golf course and capital equipment fund.
The capital equipment fund was established in 2017 to "make it more transparent for our capital purposes with governmental funds," according to Pietila. Several projects are planned to draw from the fund in 2019:
• Police office renovation for $61,800;
• Patrol squad replacement for $48,410;
• Replacement fire engine, expected to cost $599,728;
• Public Works tandem dump truck for $154,500; and
• Several other projects.
What other issues impact the budget?
Other issues driving the 12 percent levy increase include capital equipment funds increases, wages and benefits increases and maintaining a general fund balance of not less than 40 percent.
"There's a 27 percent increase in health insurance, which is about $60,000 from 2018 to 2019," Pietila said. "And wages and benefits make up roughly 63 percent of the general fund budget, so when things such as health insurance increase drastically, it really makes an impact."
Overall, the total proposed budget for the city is $23.95 million, a 4.31 percent increase from 2018.
The budget and levy will be on the agenda for approval at the next council meeting Tuesday, Dec. 11.