Restrictions on tax hikes to go before Mounds View voters

Potential changes to the Mounds View City Charter that cap the annual tax levy will be put before voters this fall with a ballot question.

“The issue is so important, we felt it should be voted on by the public,” said Charter Commission Chairman Jonathan Thomas.

The amendment to the Charter would require that the tax levy not increase by more than 5 percent from the previous year or not exceed the most recent U.S. Department of Labor Consumer Price Index for the Twin Cities metropolitan area plus 2 percent. The formula used would be the one that results in a smaller increase.

The limitations would also apply to certain city fees. The fees that would be capped by the amendment include utility charges other than water, sanitary sewer, storm sewer and street light fees, as well as recycling charges and cable, gas and electric franchise fees. It “shall also include any other fee that produces a tax burden or direct financial obligation to a simple majority of property owners and/or residents of Mounds View,” according to a draft of the amendment.

The amendment includes language that would allow the City Council to exceed the limitations, but members would need to adopt a resolution declaring the need and purpose for the increase. The Council would then be required to hold a public hearing on the matter after providing at least 10 days notice. After the hearing, the Council would need to adopt another resolution for the increase with at least four affirmative votes. The final resolution would then be put to the voters with a ballot question in the next regular municipal election or in a special election.

Recent double-digit increases in the annual tax levy were a major driving force behind the amendment, Thomas said.

“Numerous citizens felt they were just too much,” he said.

The levy increased by 27.5 percent in 2004 and 19 percent in 2005. The increases were directly related to state cuts in local government aid, said Finance Director Mark Beer.

In 2003, Mounds View received approximately $900,000 in local government aid, which accounted for 19 percent of the city’s budget. When the Legislature slashed local government aid in 2004, the levy increases were needed to make up for the loss in funding, Beer said. Without them, there would have been significant cuts in city services.

A simple majority, or 50 percent of votes plus one, is needed in the Nov. 7 general election to pass the Charter amendment. Residents that do not answer the ballot question will count as being opposed to the amendment, Thomas said.

“Not voting on the issue is a no vote.”

The Council unanimously approved a resolution to bring the Charter amendment before voters in the form of a ballot question.

“I think (the amendment) puts a reasonable cap on the city that we don’t have at the present time,” said Council Member Roger Stigney.

No new taxes

In a June work session, the Council told city staff that they want no tax levy increase next year.

“Their overwhelming indication was that they wanted a zero percent increase for 2007,” Beer said.

City staff will utilize the Medtronic Levy Fund, money obtained from Medtronic for the sale of The Bridges of Mounds View golf course, to ensure no levy increase. The fund, which was used this year to limit a levy increase, had approximately $5.4 million in it after the sale of the golf course, Beer said.

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