City Council Votes to Increase Taxes
Both Mill Levy and Street Assessments to Go Up Next FY
September 26, 2018
The Glasgow City Council voted in two separate meetings to increase tax assessments for city residents. At the Sept. 4 meeting, the council approved an increase in the number of mills to be assessed by the city in fiscal year (FY) 2018 to 2019. At the Sept. 17, meeting the council voted to increase the city street assessment which funds the road department, street repair and maintenance.
According to City Clerk and Treasurer Stacey Amundson, the reason for the increase in mills from the previous year is due to a complex tax system. First, the value of a mill in the county decreased from approximately $4,622 last FY to $4,558 this coming FY. As a result, the city was able to assess a larger number of mills and increase the projected revenue for the city from $1,266,987 to $1,303,951, or an increase of $39,963.71. The total number of mills being assessed will increase from 274.13 in FY 2017 to 2018 to the maximum allowable by state law to 286.05 in FY 2018 to 2019. That increase would be spread over the taxable valuation of the city’s residents.
According to the city, if a resident’s home has a taxable valuation (different than actual value) of 3,385 their taxes will increase by about $40.35 for a total city tax assessment of $968.28. A business with a taxable valuation of 127,720 could see an increase of $5,969.63 for a total city tax bill of $36,534.31.
The vote to increase the mil levy assessment for the coming FY was unanimous with Councilmen Doug Nistler and Stan Ozark not present for the vote.
At the Sept. 17 city council meeting, the council voted five to one to increase the city’s street tax assessment. That meeting saw a good deal of back and forth as the council tried to determine whether a two percent, five percent, seven-and-a-half percent or a 10 percent increase was necessary. Butch Heitman and Nanci Schoenfelder showed immediate support for a seven-and-a-half percent increase with Rod Karst and Stan Ozark supporting a five percent increase. Dan Carr was insistent on a two percent increase after failing to push for no increase.
After a brief back and forth between the council, Rod Karst commented, “If we can do it without increasing.”
Mayor Becky Erickson quickly chimed in with, “But we can’t.”
Dan Carr urged the council to consider not increasing the assessment, but little traction was gained. At one point Carr stated, “We’re going to have to start cutting.”
Mayor Erickson again responded with, “If you look at the budget there’s not much to cut.” The mayor would go on to describe a scenario where they would be forced to cut the styrafoam cups in the break room, “I remember those days,” she joked.
Ultimately, the council agreed to increase the assessment by five percent in a five to one vote. The only no vote was Dan Carr. Mayor Erickson summed up the back and forth in a single statement, “It’s not fun raising taxes but we have to be able to fund the services we provide people.”
City street assessments are based on the size of the lot of the property being taxed. Residential properties have a separate rate than commercial, but both are based in square feet. The five percent increase means that the city will increase the residential rate from approximately $1.27 per 100 square feet to $1.34 per 100 square feet. That means that for a lot of 7,000 square feet the total street assessment will increase from $89.36 to $93.82 or a total increase of $4.46.
Commercial property, which pays a higher rate, will see an increase from $6.39 per 100 square feet to $6.71 per 100 square feet. Therefore if a commercial property is 12,000 square feet the total tax assessment will increase from $767.28 to $805.64 or a total net increase of $38.36.
In the end, the street assessment is expected to increase city revenue for roads by $22,964.62 for a total net revenue of $482,257.07. According to the city, based on the full expenditure of the proposed FY 2018 – 2019 roads budget the net increase would leave a remaining cash balance of $34,683.21 in city accounts at the end of the FY. That net remaining includes accounting for saving for equipment purchases and future street paving projects.