Letter: City budget process has been significant challenge

Talk about it

There is little need to outline the difficult financial conditions we have found ourselves in as we sit at the kitchen table to review our bills and monitor our investments. These have been some rough economic times.

State and local governments have not been immune from the economic downturn and both the kitchen table realities that you have had to deal with and balancing a local budget have been something city staff, the Mayor and Council have been wrestling with as of late. The 2010 budgeting process puts real meaning behind our fiscal responsibility to the taxpayers of Worthington in determining priorities for another year.

The city has been given a more difficult task to balance the 2010 budget by Governor Pawlenty’s $440,000 announced cut in local government aid (LGA) that will be on the back of a $190,000 decline in 2009 and the 2008 Christmas surprise of a $228,000 reduction. These are no small numbers for the city to accommodate. To put it in perspective, for the city to recover just the $440,000 in LGA from the 2010 state reduction our levy would have to increase by 17.6 percent!

This impact is not just being felt in Worthington. For those interested in how LGA works and the impacts it is having on cities all over Minnesota, you can go to www.thanklga.org. You can find out why our local elected leaders are so concerned about the increasing disparity between the “haves” and “have nots” and what appears to be the state checking out of their partnership with local communities, especially in greater Minnesota.

After much discussion and our department heads working diligently to keep a lid on any additional requests, needed or not, Council approved a preliminary levy of 2.9 percent. This is a significant accomplishment compared to other cities like Marshall (6.9 percent), Windom (13.4 percent), Mankato (4.3 percent) and Austin (4.6 percent), which all have increases well above that mark. The 2.9 percent for Worthington is a not to exceed overall levy, and some work remains to see if we should trim additional items from the budget by December.

The other important factor when determining an individual’s tax bill against the overall city’s levy is the 2.9 percent increase in revenue doesn’t automatically translate into an increase on your bill. In talking with the city’s assessor, Byron Swart, the city saw increased tax value (new construction and other improvements) that will produce approximately $100,000 in new revenue for the city. New construction often translates into additional service requirements such as, more sewer lines, new streets to be plowed and other infrastructure costs. The $100,000 in new tax revenue would equate to approximately a 4 percent increase in the levy if a proportional amount of new services are required. What this means to an individual taxpayer is that, assuming no change in your individual valuation, you would see a reduction in your tax bill of 1.1 percent even with the overall levy increasing by 2.9 percent.

The city has to make budgetary decisions for the long-run to ensure the continued financial health of the city. A short term contraction might make good headlines for one year, but we owe it to our residents to make solid fiscal considerations especially in light of the states substantial decline in partnership with local governments. The final approval of the city levy is still coming in December, and a public hearing will be held where you can voice any concerns and ask any questions you may have. In the meantime, feel free to contact your elected leaders or me at City Hall. This is your city, and we welcome you learning more about the details of the city budget.

Tags: opinion, worthington, lga, budget