Prior Lake’s budget will increase by over $800,000 next year thanks to a 6.44% increase in the city’s property tax levy after a City Council vote Monday night.
The increase passed with Councilmember Warren Erickson against and Councilmember Kevin Burkart absent. It brings the city’s yearly budget to about $30.8 million.
Most of the property tax increase will pay for higher staffing and policing costs. City Finance Director Cathy Erickson said the cost of living this year rose more than expected.
Out of the $13 million in property taxes, the 2020 budget allocates $484,000 to cover inflation-based labor costs, $54,000 for a part time information technology support specialist, $38,000 to increase wages of the city’s paid on-call firefighters and $86,000 for updated police training and equipment.
Erickson said the levy increase should have a small impact on the majority of homeowners.
About half of Prior Lake homes will likely see a property value increase of somewhere between zero and 5%, according to information from Scott County. Within that category, a $349,600 home — the average value in the city — would see an additional $7 on its tax bill.
Other homes’ taxes would go down or go up more.
The vote to approve the budget passed after months of back and forth between city staff and council members.
In September, city staff proposed levying an additional $1 million in 2020 — almost an 8% increase in the city’s property taxes. Instead, the council capped the levy increase at 6.99%, and Councilmembers Annette Thompson and Burkart said even that was too high.
City staff proposed several potential cuts, such as holding some money back from the street overlay and legal fee funds.
In a work session earlier in the day, Mayor Kirt Briggs introduced the possibility of hiring a local law firm with some of that money to lobby the Legislature to allow cities to charge street impact fees for developments. Briggs pegged the cost around $30,000.
Councilmembers agreed to the hire but didn’t support using money from the reduced budget increase.
Briggs on Wednesday said the city would likely still employ the firm next year with the city’s general fund reserve. He said the city would continue to look for additional financial support from other cities and the Scott County Association for Leadership and Efficiency to split the lobbying costs.
Correction: A previous version of this story mistakenly left out Warren Erickson’s dissenting vote on the budget and gave an incorrect dollar amount for the tax impact on the average home. It has been updated.