Eagan Council Approves Preliminary 3.3 Percent Property Tax Levy Hike

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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.