2020 Budget Information
Preliminary 2020 Budget, Tax Levy Approved by City Council
On September 23rd, the City Council adopted the 2020 Preliminary 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 Preliminary 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 16.677%.
State statute requires cities to adopt a preliminary tax levy and budget by September 30 for the upcoming fiscal year. Once the preliminary levy is adopted it can be lowered, but not increased.
Additional meetings featuring 2020 budget items includes CIP review on October 28th; a review of proposed 2020 fee schedule on November 25th and the final 2020 budget (truth-in-taxation) hearing on December 9th. The final 2020 budget, levy, fee schedule and CIP will be adopted on December 9th.
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 4th Lowest in Hennepin County! Average city rate in Hennepin County 39.4%
Orono tax rate 16.67%
|May 27th||Discuss budget priorities and issues in preparation for 2020 budget year|
|June 24th||Review General Fund Budget|
|July 22nd||Review General Fund Budget|
|August 26th||Review updated General Fund and Enterprise Fund Budgets|
|September 23rd||Adopt Preliminary 2020 Tax Levy and General Fund Budget|
|October 28th||Additional 2020 Budget discussion and review 2020 Capital Improvement Plan (CIP)|
|November 25th||Review proposed 2020 fee schedule and utility rates|
|December 9th||Final 2020 Budget Hearing (Truth-in-Taxation) and Adoption of Final 2020 Budget, Tax Levy, Fee Schedule and CIP.|