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AUSTIN EDITION - Austin's portion of property taxes to drop slightly

By Nikki Merfeld

*merfeld@postbulletin.com

The city will decrease its portion of local property taxes about 3.4 percent for 2003, marking the second year in a row for city reductions.

This year, the city received $2.29 million of its revenue through property taxes. For next year, Austin is reducing taxes by $77,448, said Austin Finance Director Tom Dankert during Tuesday's Truth in Taxation hearing. The $5,222 decrease will result in a slight decrease to the figures Austin residents received in proposed tax statements recently sent out, Dankert said.

Another boost for homeowners is an increase in the city's total tax capacity, which is generally 1 percent of homeowners' assessed value, from $7.8 million in 2002 to $8.3 million, so there are more properties to share the tax burden, Dankert said.

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Austin had to cut taxes in exchange for a promise from the state for an additional $230,000 in local government aid. For 2003, the city has been promised nearly $7.8 million in local government aid, or about 31 percent of the city's total revenue of $25 million, Dankert said. Other government aid and fees for service provide the remaining revenue, according to Dankert.

However, with the state's dire budget forecast released today, City Administrator Pat McGarvey said he'll be surprised if Austin receives the additional $230,000 in local government aid it was promised. The effect on the city's budget likely will not be known until February but could be as high as $1 million, he said.

The city has been anticipating that hit all year. The hiring of a 30th police officer is scheduled for April and, if need be, that position could remain vacant. Hiring of a new community services librarian position is also on hold, though the city only pays 30 percent of that salary, or about $15,000. In addition to personnel, cuts can be made to capital improvement projects scheduled for 2003, said Dankert. The city could also use its fund balance to offset decreased revenue from the state.

A new component of this year's budget is the creation of a storm water utility district. For Austin Utilities customers, that will mean an additional fee of $1 to $5 on each month's bill. For Austin, that will mean $193,802 to pay for new regulations requiring storm water entering the Cedar River to meet state standards. The fee will also pay for the city's half of a watershed coordinator to be shared with Mower County.

The city was not required to conduct a taxation hearing this year because of the levy decrease.

Only one citizen, Jeff Austin, attended the public hearing. Afterward, he said he attended because he wanted to be involved in government not because he found fault with the city's budget.

The city council is scheduled to vote on the 2003 budget during the Dec. 16 regular meeting.

Last year, city taxes dropped about 0.6 percent. The prior year, city taxes increased nearly 7 percent.

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