Most taxpayers would think if the Minnetrista city council reduced the increase of the 2019 tax levy it would mean they had cut spending. They would be wrong.
The final tax levy increase was reduced Monday night from 6.01% to 4.53% but it was done without cutting a dime out of the budget. So how can that happen?
Cities have a savings account called a “General Fund Reserve’ that functions, theoretically, as a safety net to cover unexpected costs that aren’t budgeted for. Instead of doing the responsible thing, i.e., cutting spending, to bring down the tax levy, Minnetrista just decided to take over $60K out of your city’s savings account so they could spend the same amount of money as budgeted with the 6.01% tax levy increase.
It was hard to keep a straight face when one of our council members congratulated staff on working “so hard” to bring down the tax levy increase from 6.01% to 4.53%. I’m sure it broke a sweat for everyone involved to debit the General Fund Reserve for the difference.
See the article in Governing Magazine titled “The 7 Deadly Sins of Public Finance” to learn more about local government financing. A must read for city council members.