MANKATO — The Mankato City Council set a preliminary tax levy Monday night that will hold the tax rate steady for the 10th straight year, but raises additional revenue because of property taxes on new construction in the past year.
The tax capacity of the city grew by an estimated 2.4% this year and will raise nearly $800,000 in new revenue for the city.
The proposed levy would generate $20.8 million in property tax revenue.
There will be a public hearing on the levy and proposed city budget Dec. 7. The council has to set the final levy in December. The final levy can be lower, but not higher, than the proposed levy set Monday night.
City Manager pat Hentges said the proposed tax rate for 2021 is 44.06, the same as this year.
Hentges noted that while North Mankato recently voted to reduce its tax levy, as it has done for each of the past seven years, Mankato’s tax rate is still about 10% lower than North Mankato’s. North Mankato’s tax rate was 20% higher until it started incrementally lowering it each year.
Like Mankato, North Mankato is still taking in additional property tax revenue because of new construction and increased valuations.
Hentges said the two cities’ tax rates are low compared to most cities.
EDA levy also set
The council, acting as the Economic Development Authority, also approved a preliminary EDA tax levy for 2021.
The city began levying taxes for the EDA fund in 2007, using the money to support a variety of groups.
In recent years the EDA fund was set at $225,000, but last year the preliminary levy was set at $365,000 to cover higher expenses. Those included an increase in funding going to Greater Mankato Growth, which increased from $99,714 in 2009 to $194,424 in 2021.
But the final EDA fund for 2020 was reduced to $315,000, with the reduction taken mostly out of funding to assist in rehabilitating commercial and residential properties in the city.
The council Monday night set a preliminary EDA levy that would raise $365,000. The levy can be lowered, but not increased before the council finalizes it in December.
If finalized as is, the EDA levy would fund the following: $195,000 for GMG marketing services; $10,000 for Southern MN Initiative Foundation; $25,000 to City Center Business Association; $40,000 for Twin Rivers Arts & Culture; $25,000 for the Affordability Partnership Initiatives and $70,000 for assisting in commercial and residential building rehabilitation.
City Manager Pat Hentges said the EDA tax levy has remained steady over the past decade while producing higher revenue almost entirely due to new construction in the city.