The property taxes Rochester will collect in 2022 are being capped at $86.8 million.

“We don’t set a tax rate,” Rochester City Council member Patrick Keane said Monday. “We set how much we are going to collect.”

While the proposed maximum collection is a 6.5 percent increase over this year’s property tax revenue, City Administrator Alison Zelms said that doesn’t mean property owners will see their tax bills increase at the same rate.

“This is not the rate increase for paying taxes,” she said.

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What happened: The Rochester City Council approved a 6.5 percent preliminary property tax levy increase for 2022.

Why does this matter: The city must set a 2022 cap for the overall property tax collected by the end of September. The amount can be reduced but cannot be increased when the budget is finalized at year's end.

What's next: The council and city staff will continue working on the 2022 budget, which is expected to be approved by the end of the year. A public hearing on the final budget is set for Dec. 6.

Estimates cited by council members Monday state the average home will see a $25 increase, if the property’s estimated market value doesn’t increase.

As the only person to speak during the council’s first-ever public hearing on a preliminary levy, Rochester resident Paula Hardin said any increase for residents is too much.

She said the city must do more, including reducing staff, to cut the proposed 2022 city budget and keep spending flat.

“If I don’t have enough money, I can’t spend it,” she said.

Council members Molly Dennis and Kelly Rae Kirkpatrick agreed, calling for unspecified reductions in the recommended $494.4 million city budget.

“We can shave off costs and find a way to help struggling people,” Dennis said.

Council member Nick Campion said setting the preliminary levy leaves flexibility to reduce the budget before it is finalized in December, but he said specific cuts need to be proposed.

“If you want to present specific things, I’m all for continuing to work on the budget,” he told his fellow council members.

Cities and other taxing entities must set preliminary tax levies by the end of this month so counties can issue Truth-in-Taxation notices that will be sent to property owners in November.