NU sets an 8.49% preliminary tax levy
Average household looking at $28 increase to city taxes
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NEW ULM - The New Ulm City Council approved setting the preliminary 2027 budget with a maximum property tax levy of $12,192,367, an 8.49% increase over last year.
Once set, the preliminary levy cannot be raised. The City Council could make adjustments to the budget to decrease the tax levy, but it cannot go above 8.49%.
City of New Ulm Finance Director Nicole Jorgensen provided the council with an overview of the 2027 budget.
Jorgensen said overall, the preliminary budget came in lower than anticipated.
The city was looking at a dramatic increase to health insurance costs in 2027. The city was expecting insurance costs to go up over 15%, but instead the increase came in at 5% or $172,800. Though lower than expected, this 5% increase to insurance represented a 1.54% increase to the levy.
Jorgensen said 2027 will be the first full year of the city's agreement with SouthPoint for naming rights to the Recreation Center. The agreement offsets expenses by $45,000.
New Ulm also saw a $19,903 increase to Local Government Aid (LGA), but Jorgensen noted this was not enough to keep pace with inflation.
Though the tax levy is increasing, the city's tax capacity is also increasing. The city's tax rate went up by 1.41%.
City Council David Christian stressed the importance that the property tax levy does not equal what each resident pays. A levy increase of 8.49% does not mean property taxes for the individual are going up by 8.49%.
Jorgensen confirmed the 8.49% represents the increase in expenses the city needs to continue offering services. This increase is spread out over the market value of all properties in town. Assuming, a property value has not change since 2026, the city portion of taxes would only increase $28.30.
City Council Andrea Boettger said this $28 increase is an average increase and only applies to the city portion of taxes, but divided across 12 months this increase is $2.35.
"What that tells us is our finance director, our team and all our department heads are working hard to keep that as low as possible because that is less than inflation," she said.
Boettger added that tax capacity has increased and that is because of business development, business expansion and new home construction.
Christian made the motion accepting the preliminary budget for 2027 with a maximum property tax levy of $12.2 million and set the Truth-in-Taxation public hearing for 6 p.m. Tuesday, Dec. 1, with a second from Councilor Tom Schmitz and approved by the council.
Schmitz said he was comfortable with the preliminary budget at 8.49% as it could be further reduced before the budget was finalized in December.
Christian encouraged voters to talk to legislators running for office about LGA. He said New Ulm received a minor increase to LGA this year, which did not keep up with inflation. Without proper LGA funding, cities are forced to increase taxes to make up the difference. As it is an election year, he believed voters could help influence legislators to take action on LGA payments.