The city's 2006 tax levy and budget are scheduled for approval at the 7 p.m. Monday, Dec. 19, Bloomington City Council meeting at Civic Plaza.
Several residents spoke about the budget and their tax bills at the city's Dec. 5 Truth in Taxation public hearing at Bloomington Civic Plaza.
Many taxpayers asked the city to consider cost-saving measures to reduce the budget's impact on their finances. Others expressed concern about hefty increases in their properties' valuation.
the city's gross property tax levy would be nearly $38.17 million in 2006, an increase of about 5.75 percent over 2005.
Owners of a median-priced house in Bloomington - valued at $231,200 in 2006 - will pay about $2,447 in total property taxes, said Lori Economy-Scholler, Bloomington's chief financial officer. Compared to 2005, that's an 8 percent increase.
Of that total tax bill, about $726 will go to the city of Bloomington. That's up from about $685 for a median-priced house ($214,400) in 2005.
Most of that increase comes from the rising values of houses in Bloomington, Economy-Scholler said. From 2005 to 2006, the median home value increased $16,800 or 7.8 percent.
The real estate market sets the values, she added.
Of the $38.17 million gross tax levy, the city will receive about $37 million due to the state's Market Value Credit, Economy-Scholler said.
Under state law, the credit limits home value increases so that property owners don't see too drastic a tax increase from year to year. As a result, the city will actually receive about $1 million less in revenue than the gross levy indicates.
The Market Value Credit benefits property owners by keeping a cap on their tax hikes, but unlike in the past, the state does not reimburse the city for lost revenue due to the credit, Economy-Scholler said. The city must then increase overall taxes to make up for that lost revenue.
In addition, the city has not received Local Government Aid from the state since 2002 and officials don't anticipate LGA in the future.
The loss of revenue from the state through LGA and the Market Value Credit has led the city to increase property taxes to make up for lost revenue.
The city's total general fund budget for 2006 is projected to be about $47.2 million, up about 4.8 percent over the current year. The general fund will receive $31.7 million from the total levy.
In a survey of area cities about their proposed 2006 general fund levies, Bloomington's 5.75 percent increase is comparable to surrounding suburbs, Economy-Scholler said. That survey shows Edina will levy $20.2 million, up 6.46 percent compared to 2005. Minnetonka's $23.8 million levy for 2006 represents a 9.78 percent increase; while Burnsville's $22.96 million levy is a 3.6 percent increase over 2005.