We had an active meeting tonight debating the budget and levy. There were many strong opinions shared but it was all done in a respectful and professional manner. The audio should be posted in a day or two on the City website (www.cityofisanti.us) so you will be able to listen first hand. The Finance Committee which is composed of select city staff, CM Kolb and myself worked the last few months on several budget scenarios. The scenarios had a 3% increase, 0% increase and a 3% decrease to help frame the different options and cuts that would be needed to match the different levels of spending.
I recommended that we pass the 3% decrease option with two additional changes. The first change was to use the technology fund, which is financed by the cable franchise and not tax dollars, to pay for the $14, 245 in technology improvements for 2009. The other item was a bit more difficult. I recommended that the City no longer fund the Administrative Assistant position in 2009. Eliminating this position would save the City $56,000 in 2009. The 3% decrease option already had the elimination of a PT police secretary position.
In 2007 we eliminated one of the two building inspector positions because of the decrease in activity. I followed the same logic in trimming these cost. Both positions were hired in 2006 when city activity had already been on the decline. I voted against adding extra staffing at the time for the same reason I recommend that we cut the positions tonight. It was made clear tonight that this in no way reflects on the individual people holding these positions but that this was a financial decision.
I discussed that Isanti needs to reduce spending to live within our means. I used the example of our surrounding cities and their budgets compared to their tax bases. I used the 2007 numbers for East Bethel, Cambridge, North Branch and Isanti.
East Bethel $4.6 million budget and a tax base of $11.6 million or a 40% budget/tax base ratio.
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North Branch $4 million budget and a tax base of $9.6 million or a 42% budget/tax base ratio.
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Cambridge $5.6 million budget and a tax base of $7.5 million or a 76% budget/tax base ratio.
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Isanti $3.5 million budget and a tax base of $3.9 million or a 90% budget/tax base ratio.
I have used many different numbers and examples to illustrate why Isanti needs to cut spending and reduce our tax and fee burden on our residents and felt this ratio really shows how Isanti stands out compared to our region.
After much discussion CM Kolb and Duff motioned and seconded the necessary Council resolutions for the budget and levy to be passed. Many difficult decisions had to be made but the final votes were unanimous.
One more word on property taxes. I have for years tried to stress that essential regressive nature of property taxes. This means rich or poor you pay the same rate. Property taxes hurt the poor the hardest. Many of our working families feel the dramatic pain of increased property taxes whether it comes from a higher levy rate or a higher assessed value from the county assessor. Property taxes are one of those issues that our state's political parties agree needs to be fixed even if they do not see the same solution. We need to protect our tax payers, especially those among us that are most vulnerable, our seniors on fixed incomes that can be quickly taxed out of their homes.
Now the good news. We have cut spending and taxes each of my 2 years as Mayor. Spending was cut by 3% and the levy rate was cut from 59.886% to 55.51%. The levy rate cut equates to a realized 7% City property tax cut if your 2008 and 2009 assessed value stays the same. Last year I promised to work to lower taxes from the 65% rate we had when I was sworn in to the state average of 55% in 3 years. We are but a fraction of the way there in just 2 years. I promised to cut spending and work to have Isanti live within it's means - we are well on our way.
Another piece of good news is that we were able to keep an enhanced economic development marketing program in place. We will have more resources to continue to attract businesses to Isanti and those new businesses will enjoy lower tax rates along with the rest of the residents of our great City.