Eagan Council Approves Preliminary 3.3 Percent Property Tax Levy Hike

Final approval of the tax levy won't come until Dec. 4, when the city holds its Truth in Taxation hearing.

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Eagan, the ball is in your court.

That was the message from Eagan Mayor Mike Maguire as the Eagan City Council unanimously passed a proposed, 3.3-percent preliminary property tax levy increase on Tuesday night. The proposed increase would bring the total amount levied in 2013 to $28,322,017, a nearly $900,000 hike over the $27,425,081 levied in 2012.

Before the council gives final approval to the proposed tax levy increase, Eagan residents will have a chance to have their say about the levy hike and the city’s proposed 2013 budget at an open house in late November and a Truth in Taxation hearing on Dec. 4.

Now that the preliminary levy and budget have been set, city officials can reduce the preliminary levy amount and make budget adjustments, but cannot increase the proposed levy amount.

“A lot of this seems like technical rigmarole, and to some extent it is, but it is also a signal to the community that now is the time when we’re inviting you in to start joining the conversation about the community’s budget,” Maguire said during the meeting on Tuesday.

The proposed, 3.3 percent increase will help the city keep up with inflationary costs and pay for a roughly 1.5 percent pay increase for all city staff, city officials said at a budget and tax levy work session late in August. 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 Eagan Chief Financial Officer Tim Pepper.

In part because of the proposed pay increases, the city's general fund expenditures are expected to rise 2.9 percent from $28,040,000 in 2012 to $28,854,000 in 2013, according to budget documents released by the city. Roughly 77 percent of general fund budget revenue comes from property taxes levied by the city.

Despite the proposed levy increase, some Eagan residents may actually see a decrease in their property taxes in 2013 thanks to declining property values, Pepper said earlier this summer.

For example, the average home value in Eagan is expected to be $220,252 in 2013, down from $237,696 in 2012. As a result, annual taxes on that home would drop from $806 to $795—an $11 decrease.

Bob September 05, 2012 at 03:10 PM
The council evidently didn't discuss the new revenue from the two new building sites, 1, on Yankee Doodle and 2, the Cedar Grove outlets. Between the 2 sites they will create over 2 million in tax revenue and yet they still increase our taxes.
Mike Maguire September 05, 2012 at 06:04 PM
Bob, Just FYI the two sites you refer to DO NOT produce any additional revenue for Eagan's general fund in 2013. The cite on Yankee Doodle (the Lockhead- Martin site I presume you're talking about) has not been approved for redevelopment and as such its property valuation and resulting contribution to the tax levy is FLAT between 2012 & 2013. The second property, Cedar Grove outlets, while further along in that process has also not been approved but even when it is in is a Tax Increment Finance (TIF) District specifically for the purpose of incenting investment and redevelopment. The basic philosophy of a TIF district is to reinvest additional property taxes resulting from increased values within the district back in the district to encourage investment (i.e. infrastructure etc). That "increment," the difference between previous property tax revenue and that revenue that results from higher values CANNOT be used for Eagan's general fund/ operations and for a term of 30 years (I believe we're about 10 years in) that will be the case. At the end of the TIF District's term that "increment" will then be on the general rolls. Just to clarify on both. Best, Mike


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