Eagan Council Approves 3.3 Percent Property Tax Increase

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The Eagan City Council unanimously passed a 3.3-percent property tax levy increase on Tuesday night—a hike that will help the city keep up with inflationary costs and pay for a roughly 1.5 percent pay increase for city staff.

The increase will bring the total amount levied in 2013 to $28,322,017, nearly $900,000 higher than the $27,425,081 levied in 2012.

Because of the hike, Eagan property owners will likely see a slight increase on the city's portion of their property tax statements next year. The average home value in Eagan is expected to be $220,252 in 2013, down from $237,696 in 2012. Despite declining property values, annual taxes on that home would likely increase from $806 to $814, Eagan Finance Director Tim Pepper said in a presentation to the council on Tuesday.

That runs counter to what Pepper predicted at a preliminary property tax levy hearing held earlier this year, when he told the council most homeowners could experience a slight decrease in taxes due to declining property values.

But the situation has changed, Pepper told the council, because Eagan won't be receiving as much fiscal disparities money from the state as previously expected.

Roughly 77 percent of general fund budget revenue comes from property taxes levied by the city. Public safety funding accounts for roughly 46 percent of the city’s general fund expenditures. The city's Parks and Recreation Department comprises 16 percent of general fund spending, while the Public Works Department funding makes up roughly 13 percent of expenditures.

City officials maintain that the city has lower property taxes than many other communities in the area. The owner of a $220,252 home would likely pay higher property taxes in on that property if it were located in 14 nearby cities, including Inver Grove Heights, Burnsville, Bloomington, Apple Valley and Hastings.

Only Plymouth, Eden Prairie, Mendota Heights and Minnetonka have lower taxes, according to a survey conducted by city officials.

In part because of the proposed pay increases for city staff, the council also approved a 2.9 percent increase to the city's 2013 budget—from $28,040,000 in 2012 to $28,854,000 in 2013.

With the exception of several union groups that had previously negotiated for pay raises, Eagan city staff have had their wages frozen for the past three years, according to Pepper.

For more information regarding the city's 2013 budget and tax levy, click on the PDF attached to this article.