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The City of Austin held its annual Truth in Taxation Hearing Wednesday evening. City Administrative Services Director Tom Dankert provided details about the proposed 2021 tax levy and operating budget during the public hearing that is required under Minnesota Statute. The council voted unanimously to recommend resolutions for both following the hearing.

The city’s proposed budget for fiscal year 2021 is $36,489,461. Proposed expenditures are broken down as follows:

• General Fund – $18,799,267

• Recreation Programs Fund – $105,963

• Library Fund – $1,235,174

• Tax Increment Debt Service – $346,768

• Capital Improvements Fund – $2,973,780

• Sewer User Fund – $5,930,882

• Waste Transfer Fund – $70,976

• Storm Water Management District – $1,015,346

• Port Authority Funds – $962,386

• Central Garage Fund – $2,223,447

• MIS Replacement Fund – $263,221

• Fire Equipment Fund – $203,000

• Risk Management Fund – 2,359,251

The proposed tax levy for payable year 2021 is $7,436,000, a four percent increase from 2020. This is an estimated increase of about $18 for the year on a home valued at $130,000.

The tax levy is a major revenue source for the city; proposed tax levy expenditures are as follows:

• General Fund – $5,183,946

• Library Fund – $1,026,054

• Port Authority Fund – $50,000

• Capital Improvement Plan Revolving Fund – $1,176,000

The council agreed to a self-mandated four percent tax levy increase earlier this year after Mayor Tom Stiehm said he would veto anything higher than that. The council also had to consider the implementation of the Compensation and Classification study and eliminated 4.5 city positions to maintain a four percent increase. The positions were vacant and no employees were laid off, though Dankert said the loss of those positions could hamper some city services. He also noted that the Compensation and Classification study estimates a need for additional funding/staff reductions in the next two years as vacancies occur as additional costs of the study are estimated as $1,125,000 in 2022 and $850,000 in 2023.

In 2020, Austin residents paid 40 percent of their tax dollars to the City of Austin. Mower County, the school district and other entities accounted for 36 percent, 22 percent and 2 percent respectively.

Another major revenue source is Local Government Aid (LGA), which Dankert advised could be affected due to the impact of the coronavirus pandemic on the State of Minnesota’s budget. The city is certified for an LGA increase of $161,383 for a total of $8,661,967 for 2021; however, because of the uncertainty, the council budgeted using the 2020 LGA total of $8,500,584.

LGA currently accounts for 45.22 percent of the General Fund budget.

The council will vote to adopt the tax levy and budget amounts for the payable 2021 year during its next meeting on Monday, Dec. 21. Should they pass, the city will certify the amount to Mower County and the State of Minnesota.