Proposed Maple Grove 2012 Budget Reflects Slight Increase

The Maple Grove City Council held a 2012 budget hearing during the regular meeting Monday, Dec. 5. 

Finance Director Jim Knutson presented the highlights of the proposed 2012 budget for Maple Grove. At the public hearing the same evening, no residents spoke before the council.

The is scheduled to be adopted by the Maple Grove City Council at the Dec. 19 meeting. 

Here's a look at what is included in the 2012 budget for Maple Grove. The following information was provided by the city of Maple Grove in the winter newsletter.

The proposed 2012 general fund budget totals $34,063,800 (a 2.01 percent increase over 2011) and provides funding for a growing suburban community that is expected to reach an estimated population of 63,052 residents by April of 2012. That population is 1.27 percent higher than April of this year (25.2 percent higher than the 2000 Census). It reflects the tremendous residential construction that has occurred in Maple Grove in the last 11 years.

The city has implemented a number of cost saving strategies that have impacted the 2011 and 2012 budgets including the elimination of three positions, delayed rehiring upon retirements and resignations, participation in group purchasing programs, and taking advantage of the current interest rate environment by refinancing debt. In 2011, the city received stimulus funds to implement a number of energy saving programs, and the city will see these savings on utility bills in 2011 and 2012. The city also has upgraded its telephone system which has reduced annual maintenance and support costs.

As in prior years, the city continues to get the largest portion of the general fund revenue from the property tax. In 2012, the tax levy will provide approximately 83 percent of the revenue with development fees the next largest revenue source. A portion of the tax levy is used for principal and interest payments on existing city bonds that were issued for the Government Center. The tax levy is proposed to decrease by 0.04 percent to $31,186,800 in 2012. The city is experiencing slower development and is projecting reduced development revenues in 2012.

Each year the city does a study of homes in an effort to show the impact of the proposed tax levy. The accompanying chart shows the impact of the total levy on an average home for each market value range. This year the majority of homes in the city will see a slight increase in the city portion of the property tax bill with the average home increasing by approximately $7.17 in 2012 or $0.59 per month.

Maple Grove has approximately 21,715 homes within the city with an “average” value of about $253,400. That “average” value home decreased about 3.94 percent from last year’s “average” of $263,800 and will pay an estimated $940.08 in city property taxes in 2012.

In 2011, the legislature eliminated the Market Value Homestead Credit (MVHC) program for 2012 and replaced it with a homestead market value exclusion program. Under the new program, the homestead market value exclusion is 40 percent of the home’s value and reaches a maximum for a $76,000 home and phases out when a home reaches approximately $414,000.

Although the new market value exclusion program is computed in a manner similar to the repealed MVHC, the new program will shift taxes among properties within our community, especially to commercial, industrial, apartment and other properties that will not receive the benefit of the market value exclusion. The “bottom line” for the “average home” will be an increase in the city tax by $7.17 – 0.77 percent higher than last year. The calculation of the city’s property tax is shown in the accompanying chart.

Almost 44 percent of the city tax bill finances public safety. Two departments (engineering and fire Inspections) are completely funded by development fees. Some water quality programs are included in the engineering budget and are funded by the property tax levy. 

The city will also be making a small levy for the Housing and Redevelopment Authority. The levy will be no more than $150,000 and will be used for both housing and economic development activities. The levy is not a part of the city levy and will be collected under the “special taxing district” line of the property tax statement. For the “average” house that is discussed in this article, the impact would be approximately $4.89 in 2012.

In summary, the proposed levy and related expenditures will provide sufficient resources for the continuation of city services in 2012. Expenditures are proposed to increase by 2.01 percent. The property tax levy is the main source of revenue for the general fund and is proposed to decrease 0.04 percent. Growth in the city reduces the impact of the tax levy to an increase of 0.77 percent for the average home in Maple Grove.