2021 Budget Information
2021 PRELIMINARY TAX LEVY & GENERAL FUND BUDGET
On September 28th, the City Council approved the preliminary tax levy of $6,485,620 for 2021. This is an increase of $478,170 (7.96%) over the 2020 tax levy. The increase includes an additional $132,000 for the Pavement Management Levy; re-establishment of a Park Levy in the amount or $50,000; and a new levy for the establishment of the Building Fund. The tax rate is projected to decrease slightly from 16.512% to 16.503%.
The General Fund Budget is increasing by $117,300 dollars (1.3%) to $9,260,500. The main factor in this increase are wage and benefit increases, which is increasing by $167,400. The Police unions’ wages are increasing by the 2021 contract amount of 3%. Local’s 12 and 49 wages are still being negotiated. Other increases include an increase of $51,700, in professional services and $17,500 in Supplies and maintenance.
The Final 2021 Budget and Tax Levy will be adopted on December 7th, 2020 after completion of the Truth in Taxation public hearing which begins at 6:00 pm.
2020 BUDGET INFORMATION
Final 2020 Budget, Tax Levy Approved by City Council
On December 9th, the City Council adopted the 2020 General Fund Budget and Tax Levy. The General Fund pays for basic government services like Police, Fire, Street Maintenance, Building Inspections, and Zoning. The General Fund expenditure budget is increasing by $565,920 (6.6%). This increase is being partially funded by non-tax revenue sources and requires an increase of $299,000 (6.8%) in the General Fund tax levy. $80,000 of the General Fund increase is due to a shift in funding routine road maintenance from the Pavement Management Fund to the General Fund.
The property tax levy has three components. The first is the operating levy which is adopted to fund the General Fund Operating Budget. The second part is the Pavement Management Levy that is needed to fund the City’s pavement maintenance plan. The final levy component is for the debt service of the City’s outstanding bonds.
The approved 2020 Tax Levy is $6,007,450, an increase of $372,000 (6.6%) over the 2019 tax levy. The increase includes an additional $153,000 for the road maintenance and reconstruction; reflecting the Council’s desire to establish a long term funding solution for the City’s road infrastructure. The tax rate is projected to increase from 16.406% to 16.498%.
What Does My Tax Dollar Pay For?
12% of the tax levy is used to pay the debt service on outstanding bonds. The Pavement Management Levy equals 10% of the levy. The other 78% is used for the General Fund to pay for basic government services like Police, Fire, Streets, and Zoning. A large share of General Fund Revenue (49%) is from non-tax sources: Licenses; Permits; and Contract Revenue. The chart to the right illustrates the percentage of each tax dollar used to fund General Fund programs net of the non-tax revenue sources. Funding for capital maintenance of roads has increased from $0 in 2015 to $617,450 in 2020, reflecting the current council’s commitment to road infrastructure.
Why Are My Taxes Increasing by More (or less) Than the Levy Increase?
The City’s property tax levy is only one of several taxing jurisdictions that are included on your tax statement. The City’s share of the tax bill is only 15% of the total. Levy changes by the other jurisdictions can have a greater impact on your total tax than any change by the City. Contact information for all taxing jurisdictions is available on your proposed tax statement.
Orono’s Tax Rate is the 3rd Lowest in Hennepin County!
Average city rate in Hennepin County 39.4%
Orono tax rate 16.5%