16.4 percent tax hike is most recent projection but could be scaled down by December
By Louis Hoglund
Crunching numbers has been a challenge for Pelican Rapids city officials for the 2024 budget planning cycle.
With the new pool under construction—and the associated debt— the preliminary budget has been through several versions over the past two months. The working budgets ranged from 26 percent to below 5 percent tax increase, under several revisions.
Paramount to the city’s planning is structuring the pool debt payment, while easing taxpayers into a long-term commitment—with as little pocketbook pain as possible.
A 16.2 percent tax appears likely in 2024. Maybe less, if pencils are sharpened and a few costs can be trimmed before the December budget deadline.
But Pelican is not alone in struggling with the numbers.
Between inflation, rising labor costs, and climbing interest rates, several cities in the region are projecting substantial tax hikes—some in the double digits:
Ottertail, on the other side of the county, may experience a 30 percent tax increase.
Menahga is considering a whopping 41 percent tax hike, though it may be trimmed back before the December deadline.
Cities face an initial deadline for preliminary budgets. For December final budgets, the levy can be trimmed—but cannot be increased. So, any of these projected levies could be trimmed over the next month.
Henning is eyeing a 20 percent hike.
Barnesville was at about 12 percent in September.
Parkers Prairie set its preliminary at 8.9 percent.
Hawley is looking at 9 percent.
Glenwood adopted a 9.1 percent preliminary budget.
Perham’s preliminary budget was set at 6 percent.
Levies for area cities have generally hovered around 3-6 percent for much of the past decade. So these higher levies are a reflection of the rising costs of doing business as a municipality.
On two separate drafts, Pelican’s tax increases appeared to be headed to the 25 to 27 percent range—driven almost entirely by the special levy to finance the pool and aquatic center.
The legislature approved $1.5 million for the Pelican pool project, which helped reduce project costs. Shifts in when the state money is applied to the pool debt will help reduce sticker shock for the next couple of years. The council is considering “front-loading” the state funds for the next two years—to limit the load on local taxpayers.
“This will ease taxpayers into this, without smacking them the first two years,” said city administrator Lance Roisum. “Hopefully we see some growth in the tax base over the next couple years,” he added, which would spread the pool debt payment across a broader base.
Another cut is expected by deferring a potential $30,000 roofing job on one of the city shops. Roisum said the city may look at patching the roof, which could buy a few years before a full roof replacement.
By setting the preliminary levy at 16.2 percent now, “we have some room to maneuver between now and the final deadline in December,” said Councilman Steve Foster, who also serves on the budget committee.