Sales tax growth to reduce Mandan property taxes
Mandan homeowners can expect to pay less for their city property taxes in the 2014 budget but more for their water bills, said City Finance Director Greg Welch.
The draft of the city’s $26.8 million budget was presented Tuesday at the Mandan City Hall. A final budget hearing will be held 6 p.m. Sept. 17.
Approximately 24 percent of the property taxes paid by people living in Mandan go to the city of Mandan.
Welch said Mandan will use a total of $3.4 million in property taxes to run the city next year — about $200,000 less than 2013. The city collects a total of $25.6 million in revenue sources per year.
City sales tax revenue increased from $2 million to $2.24 million. Welch said the extra $200,000 will be used to offset property taxes collected, despite higher home values.
“We’re looking at transferring additional sales tax to the general fund to be used for additional property tax reduction,” Welch explained. “That doesn’t take into account the new Walmart sales tax revenue we’re anticipating.”
The new Walmart is scheduled to open before the new year.
Welch said the owner of a $200,000 Mandan home can expect to pay $48 less in city property taxes next year- a drop from $842 to $794.
A combination of more sales revenue, a bigger tax base and a healthy local economy will help lower property taxes that homeowners pay, said City Administrator Jim Neubauer.
Home values in Mandan increased by 6.9 percent, Welch said.
City officials also propose to lower the city mill levy from 93.55 mills in 2013 to 82.61 mills, because each property tax mill levy value increased from $46,623 to $50,857.
Yet, the city also is proposing to raise base water rates by $3.50 per month, about a $42 annual increase per household. This will be used to help pay for $2.4 million in upgrades to the city’s water meter system.
Neubauer said the city is using four different types of meter readers now – ranging from manual inspections to electronic drive-by scanners. The city is phasing in a uniform system of the scanner system.
“It’s consumption-driven,” Neubauer said of the higher water costs.
The net difference between the lower property taxes and the higher water bills will be about $6 less that a homeowner pays the city per year in 2014.
In its budget, the city will increase its existing $8.9 million budget for salaries by another $1 million in 2014.
Department heads have requested 12 new employees in the new budget – five new police officers (including one warrants officer), four paid firefighters, an assistant finance director, a shared administrator/community development worker and one city maintenance worker. If approved, the new positions and benefits will cost the city $658,000 more.
“Nine are for public safety,” Neubauer said.
The 2014 budget also adjusts annual salaries by $224,000 so that Mandan employees will be paid in the 95th percentile of what Bismarck workers make. The raises were approved to help keep long-term workers.
Full-time city workers will receive a 2.5 percent pay increase based on performance.
The budget for part-time city seasonal workers will increase the budget by $32,000. “We are struggling to get part-time workers,” Neubauer explained.
City officials are studying how feasible it will be to switch its health insurance formula to pay full-time workers’ family by their fourth year of employment instead of seven. Single insurance plans are paid by the city. Full-time workers pay the difference between a single plan and family plan. The city’s portion increases in increments.
–Lee News Service