Duluth could see 2% levy increase — but taxpayers won’t feel it, mayor says

DULUTH – In what Mayor Roger Reinert billed as a “breather” for taxpayers, he revealed Monday night his proposed 2025 budget would raise taxes about 2%, to be covered by projected growth in the city’s tax base.

The budget delivered what he promised residents during his spring state of the city address, he said, which was to keep the city’s portion of property taxes flat, with investments in areas he prioritized during his mayoral campaign. He proposes boosting the levy by about $800,000, to $43.4 million.

Reinert’s budget is assisted by a $4.5 million windfall freed up from retiree health care costs. Two decades ago, a $280 million unfunded retiree health care liability threatened to bankrupt Duluth. Former Mayor Don Ness implemented a controversial strategy to dramatically cut costs and annually dedicate millions to fund future obligations. Fifteen years later, those obligations are paid for.

Reinert proposes the $4.5 million be used to help pay for a new consolidated city maintenance building that would replace four that are outdated.

His $109 million general fund budget includes new spending on public safety, including positions for a pilot program that will address Fire Department overtime; real estate and criminal prosecution positions for the City Attorney’s Office, and parks and facilities maintenance. Reinert said he has no plans to reduce city staff, contrary to “some conversation I’ve heard in the community.”

“We don’t have a city without city employees,” he said.

The owner of a $275,000 home could see the city portion of their annual levy decrease by $46 if their home value doesn’t change. Home values in Duluth have consistently gone up in recent years.

Other regional centers are asking for larger increases — Rochester at 10% and Mankato at 3%. Both St. Paul and Minneapolis propose about 8%.

The city of Duluth receives 27% of taxpayer revenue.

Local 66 AFSCME members in green shirts held cat-eye signs in City Council chambers Monday that said “AFSCME is watching.”

Union President Wendy Wohlwend said her unit, currently in negotiations, hadn’t received market adjustments the way police and fire unions have in recent years. The city’s largest union includes workers for utilities, libraries, parks and streets.

“We are core services,” Wohlwend said. “We just want a fair and equitable contract.”

The City Council has until the end of the month to approve a proposed levy, with a final vote taken in December. It will spend all of Friday at a retreat going over the budget.