A 2014 city levy increase of 5.7 percent, most of which won’t hit current taxpayers, is expected when the Burnsville City Council adopts its maximum levy Sept. 3.
Most of the increase — 4 percent — comes from scheduled decertification of a tax-increment financing district, which will return some properties along County Road 42 to the tax rolls.
The council has long planned to use that $1.1 million to replenish the city’s infrastructure trust fund, which is dedicated to replacing and repairing aging streets and parks.
The remaining 1.7 percent increase is slated for maintaining current city service levels, feeding other project funds and contributing $50,000 to an ongoing effort to combat emerald ash borer.
The total proposed levy increase is $1.56 million. The council can approve a lower but not a higher amount when it adopts its 2014 budget and levy Dec. 3.
Of the $1.56 million, only 0.8 percent, or $211,041, comes from existing taxpayers. Taxes from new construction account for a similar amount.
Most of the 5.7 percent levy hike is “fresh money,” Council Member Dan Kealey said at an Aug. 13 work session, where council members agreed on the amount. The total proposed levy is $29.07 million.
City taxes on an average-valued Burnsville home ($191,200) would rise by 3.8 percent, or $30, next year. The increase assumes a 3.6 percent rise in home value — the city average — from 2013 to 2014.
Taxes on $1 million in commercial property are projected to fall by 0.6 percent, or $56. Average commercial valuations in Burnsville have remained flat.
Officials worried in June about levy limits newly imposed by the 2013 Legislature and whether the city’s planned tax hike would exceed its limit.
New information from the state Department of Revenue shows Burnsville’s limit to be $1 million higher than originally calculated, according to the city. Even at 5.7 percent, the city is 0.6 percent below its limit.