RIVER FALLS — The city proposes no property tax increase for the average taxpayer in 2021 thanks to new construction in Pierce and St. Croix counties, according to a budget workshop presentation Oct. 13.
Increasing the levy by 1.98% — the amount of net new construction in the tax base — would result in a 0% net levy increase next year for the average homeowner, City Council members heard during the workshop.
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The city portion of the tax bill on a $200,000 house in River Falls is estimated at $1,403 in 2021, down from $1,426 this year, according to a staff report. The full tax bill could differ depending on if a homeowner lives in the St. Croix County or Pierce County portions of the city.
Council members spoke generally in favor of the proposed levy, though discussion included concerns surrounding planned retirements amid a city-wide hiring freeze due to the pandemic and how to prioritize capital projects.
A financial recession is expected in 2021 and planned for in the city budget.
Part of that planning is increasing the city’s contingency account by $50,000, Finance Director Sarah Karlsson said. “Just recognizing the uncertainty that 2021 might bring.”
The budget discussion will continue at a workshop Tuesday, Oct. 20.
On the brightside, the fiscal impact of the pandemic was not as bad as initially expected this year.
“We’re on the lower end of the initial estimate, in a good way,” City Administrator Scot Simpson said about revenue loss due to COVID-19, though he cautioned hardships could arise as the pandemic continues.
The city estimated a $331,000 reduction in general fund revenue as of Sept. 30, compared to an initial estimate that had the potential for up to $700,000 in reduced revenue, according to a staff report. The pandemic impact was further offset by building permits coming in $100,000 higher than budgeted and $257,000 in CARES Act dollars to cover COVID-related expenses.
The city is not expected to dip into the fund balance for 2020 in part because of $580,000 in general fund expense reductions, such as the hiring freeze and restricted spending on advertising, supplies and travel/meals for staff, Simpson said.