Viewpoint: In dollars, taxes going downIn the Aug. 26 Bulletin, a story appeared titled “City’s quandary: Raise taxes or cut services?” which gave the impression that Cottage Grove is raising taxes.
By: Myron Bailey, South Washington County Bulletin
In the Aug. 26 Bulletin, a story appeared titled “City’s quandary: Raise taxes or cut services?” which gave the impression that Cottage Grove is raising taxes. While it is accurate that the tax levy rate is projected to increase from 34.642 percent to 35.339 percent, the actual tax dollars levied is decreasing by $291,500. Here is the total tax levied recently and proposed for 2010 — 2007: $11,822,450, 2008: $12,184,000, 2009: $12,446,500, 2010: $12,155,000. As one can see, the actual tax dollars paid by property owners to the city in 2010 will be almost 2.34 percent less than was paid in 2009. It is also worth noting that the total tax dollars paid in 2010 will also be less than in 2008 and only 2.8 percent more than was paid in 2007.
As a result of the above tax levy more than 75 percent of homeowners will pay lower taxes to the city in 2010 than in 2009.
The tax “increase” perception comes from the projection that the tax rate will increase slightly. That is due to the fact that market values have declined over the past year. In order for the rate to not increase, the actual levied dollars would have to decrease an estimated $357,600 farther than is proposed for 2010. For the average home with a value of $221,600 in 2009 experiencing a drop in value to $205,600 (7.2 percent) in 2010 the property tax paid to the city will drop from $702 to $667. If the total tax levied for 2010 was reduced by the $357,600 noted above (in order to maintain a level tax rate) the $667 projected tax bill would be reduced to $641.
City departments have done a wonderful job of managing limited resources for a very long time. While we hear suggestions that “fat” must be cut from the budget, we would urge your consideration of the total general fund expenditures of the recent past — 2005: $12,506,689 (actual), 2006: $12,463,170 (actual), 2007: $12,562,146 (actual), 2008: $12,233,430 (actual), 2009: $13,254,600 (budgeted), 2010: $12,789,450 (proposed).
The above shows that actual expenditures for 2010 are proposed to decline by 3.51 percent from 2009. More importantly, 2010 expenditures are expected to exceed those of 2005, six years earlier, by only 2.2 percent. Moreover, our current full-time staffing is at the same levels as we had in 2001 even though our household growth is up 18.1 percent and the Implicit Price Deflator (an inflation factor for local governments) is up over 38 percent during that same period!
While there is always the opportunity to find ways to operate more efficiently, I believe that if the facts are truly examined and understood, Cottage Grove spending and resulting taxing will stand up well in the comparison. Past city councils have done a great job of managing your money in a fiscally prudent manner. As mayor, I intend to continue on that same path. This is a challenge given that the state has eliminated $584,000 in funding from the city in each of the years 2009 and 2010.
Myron Bailey is mayor of Cottage Grove.