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Budget committee discussions show potential increase of 8.46 percent
The city of Ely appears on track to increase its property tax levy in 2025.
The lack of a quorum delayed any discussion this week, and a preliminary levy won’t be set until September, but minutes of the city’s budget committee suggest that a levy hike may be in store.
Monday’s budget committee meeting showed that the city now projects a budget with $125,400 in additional spending and a possible 8.46 percent increase in the property tax levy.
But for now those numbers remain unsettled and city department heads are set to go over the numbers and come up with a new budget to be presented to the budget committee in September.
The preliminary tax levy, which may be decreased but not raised before final certification in December, is due by Sept. 30.
The budget committee meeting minutes also reveal some resistance to the potential levy hike, with council member Paul Kess saying “the 8.46 percent increase in property taxes needed to be reduced,” according to the minutes.
Kess was one of four council members who was not present for Tuesday’s meeting, which prompted it to be canceled.
The committee meeting minutes also show that members suggested an array of ideas for possible spending reductions that would bring down the levy.
Those include moving some fire department spending to the equipment replacement fund, reducing part-time employee funding for police, spending some of the city’s fund balance or reducing a portion of the tax levy set aside for capital projects.
Last fall, council members settled on a 2.99 percent increase in the city levy.
While the city collected more in local property taxes this year, it also received a significant jump in its primary source of revenue - state aid.
Local government aid from the state of Minnesota to the city jumped by 10.1 percent from $2.55 million in 2023 to $2,717,100 in 2024. The city also got about five percent more in taconite aid, bringing that amount to $352,000.
Together, those monies cover more than 75 percent of the city’s general fund budget in 2024.
LGA is expected to increase only by $3,400, or .002 percent, in 2025, and the amount of taconite aid the city receives is slated to go down.
