Rochester council signs off on 9.4% maximum tax levy increase

ROCHESTER - The Rochester City Council on Monday signed off on a 9.4% property tax levy increase for next year.

The council also set the city's 2024 budget at $575 million, which is $12 million less than this year's budget.

The 9.4% increase doesn't necessarily mean a similar tax hike for homeowners. It will be covered in part through new developments and changed property assessment values. It's also in line with previous levy increases in the years leading up to the pandemic, where levy hikes were more than 8% annually.

The average home valued at about $315,000 should expect to see a $73 increase on its taxes in 2024, according to property tax estimates.

Still, property values are growing in the Rochester area, meaning more taxes for property owners. Olmsted County last month estimated existing properties on average are getting taxable market valuation increases of more than 5%.

If it stays at its current level, Rochester's tax levy will bring in over $100 million — up more than $20 million from the city's 2021 tax levy and almost $9 million above this year.

The new levy accounts for increased public safety costs and flood control, as well as general city costs and public works. It also offsets decreases in pandemic-related aid as the city spends it down over the next few years.

Most council members appeared resigned to the larger increases, though Molly Dennis — the lone dissenting vote — said she believed the city has wasteful spending it could cut, including money spent on consultants and outside firms during project bids. She called for more explanation in the budget process and urged council members to review parts of the budget line-by-line.

"I think we could do better if we had more time," Dennis said.

Council Member Patrick Keane dismissed Dennis' comments as part of her ongoing complaints against city administration and said the city doesn't have the kind of wasteful spending she alleges.

"It is not happening, and if it were it would be discussed up here, and there would be repercussions," Keane said.

Other council members worried Rochester's explosive growth in recent years has outpaced city staffing and public resources.

"How do you expect to pay for an infrastructure in a city that is growing the way we are growing?" Council Member Kelly Rae Kirkpatrick said.

The council will finalize next year's budget and tax levy on Dec. 4. The levy can stay at the same level or go down depending on the council's decisions.