Some towns see big property tax hike

This is a hectic time of year for mayors and city councils. They're making final decisions on what property taxes should be next year for homes and businesses. Many have already approved 2011 rates; others will soon.

It looks like most towns will see property levy increases of under five percent, some will see no increase, and a few will have a reduction. But a few towns will have to deal with sharp increases.

The southern Minnesota communities of Truman and Wanamingo are a couple of examples. The Truman levy will be 40 percent higher than last year. Wanamingo has not finalized taxes yet, but the working proposal is just over 39 percent.

Wanamingo City Administrator Michael Boulton says the sharp increase appears to be "the only option we have."

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The hike will mean a $100 to $300 city property tax increase for most homeowners. Businesses, depending on their size, could easily see a boost of $1,000 or more.

Boulton says there are several trouble areas in the city budget. Some city backed economic development projects have not done as well financially as hoped, so Wanamingo is not getting the revenue from them it had planned on. Plus a city owned senior living center has lost money over the last several years.

Cuts in the city's share of state Local Government Aid (LGA) also hurt revenue.

In Truman, the main reasons for the sharp property tax hike are to pay for a fire hall addition and a police officer salary. The city also needs to pay off some of the bills it accumulated fighting flood waters last September. LGA cuts have also hurt the town.

Speaking of LGA, most Minnesota cities and towns have been told they'll get at least what they received last year and in some cases maybe a little more money in 2011. But how confident are city governments that the full amount promised will arrive?

Wanamingo City Administrator Boulton puts his expectation of seeing all the money at "zero." He says with the state facing a huge budget deficit, the promised LGA payments will almost certainly will be cut again next year.