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The budgetary process

To the editor:

Did everyone get a chance to review their proposed 2017 city property tax estimate yet? Based on the number of emails and telephone calls, I am pretty sure most everyone received it! Maybe I can help by explaining the process…

You received your notice based upon the worst case scenario, and here is the reason why. The City Department heads start working on the budget in July/August of each year based upon estimates for the new fiscal year. A preliminary budget proposal is submitted to the City Council in September, where they can add to or subtract from the preliminary budget and 2017 property tax levy. From September to December, the City Council and staff review the proposed budget, errors are corrected, estimates are refined, priorities are changed, and unanticipated new projects can be inserted and proposed projects removed. But in the end, as required by state law, the final property tax levy may go down, but can’t exceed the preliminary tax levy.

So where does that leave us with the 2017 proposed tax levy for the City of New Ulm? The big driver of the proposed tax increase was the $1 million to be levied for the acquisition of additional land for future industrial development. This one item is about 14 percent of the 20 percent increase, and in December, the City Council may decide to use existing city funds instead of using 2017 tax levy dollars. If this were to happen, the proposed increase in city property taxes would be about 6 percent. Another possibility is to not consider the acquisition of additional land for future industrial development at all for the upcoming year. This decision will be made by Dec. 20, when the final budget and tax levy are approved. Until then, the City Council will continue to discuss community priorities, the need for projects and programs, and setting levels for basic city services. Although possible, it is unlikely that their final decision will result in a 20 percent increase in the city property tax levy.

I hope that this information helps you better understand the preliminary budget and levy. Although the preliminary increase was large this year, it gave the City Council flexibility in looking at funding options while working through the decision making process. FYI: On Dec. 6, 2016 at the 6 p.m. proposed property tax meeting, citizens can provide written and oral comments to the City Council.

Robert J. Beussman

Mayor

City of New Ulm

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