The city of Le Sueur’s preliminary tax levy has been set. At the Sept. 9 Le Sueur City Council meeting, the councillors approved a 9.47% increase in the preliminary levy. Despite the citywide increase, some residents could see their taxes go down, depending on property value changes.
The Council set the preliminary levy at $2.8 million for 2020, up from last year’s levy of $2.56 million. The levy is nearly $250,000 greater.
Le Sueur Finance Director Zach Doud explained that, because many property values across Le Sueur have increased, the city is able to lower the tax rate this year and still reach the proposed levy amount for 2020. Because the tax rate is set to drop, any residents who have not seen an increase in their property values would see their property taxes go down.
“[The increased levy] doesn’t mean your taxes are necessarily going to go up next year,” said Doud. “You might see a decrease in your taxes. It depends on what your home does.”
But the average homeowner citywide likely saw an increase to their individual property values and are therefore likely to pay more under the current proposed levy.
In 2019, the average value of a home was $173,000 and the average homeowner paid $1,359 in property taxes to the city.
In 2020, due to the lower tax rate, a person with the same home value would pay $34 less under the preliminary levy. However, because average property values in Le Sueur have increased, the average home value now stands at an estimated $194,000, and the average homeowner would pay an estimated $1,486 in city property taxes, $127 more than in 2019.
The preliminary levy approved by the City Council was unchanged from the amounts presented to the council at the Aug. 26 council meeting. According to state statute, Le Sueur will not be able to raise the levy from this point forward, but the city can still lower it before the budget is finalized in December.
City Council set a public hearing for the levy on Dec. 9. At that time, residents will be able to raise questions and concerns before the council finalizes the 2020 budget and levy.
The levy may still be reduced going forward, because city staff has made conservative estimates on revenues the city will receive in 2020. The levy amount is set based on the difference between Le Sueur’s expenses and revenues — the smaller the difference, the smaller the levy.
The primary contributors to increased expenses in the 2020 budget are plans to resurface the municipal pool and increase pool hours, construction of a pickleball court, extension of the airport taxiway with the addition of utilities, and additional funds allocated for street maintenance.
At the Aug. 26 budget meeting, Doud explained that city staff made conservative estimates on revenues so that the city would not run out of necessary funds in 2020.
“If we overestimate revenues, we’ll only have so much dollars for taxes, and if we don’t get those revenue numbers, then we’re short falling at the end of the year,” said Doud. “We can lower the tax levy at any time after the Sept. 9 meeting, but we are unable to increase it. So if I were to take a lot less conservative number on building permits going into Sept. 9, then if [our conservative estimates] are actually true, then we are stuck.”
“The preliminary levy is our best guess,” City Administrator Jasper Kruggel said at the August 26 meeting. “By the time you see the final levy in December, we should really know what’s going on. There’s a couple wild cards out there regarding the economy, and things like that, that we want to keep an eye on. We don’t want to overestimate our revenues.”