Kandiyohi County 2023 tax levy set to increase, but individuals won't see full impact
The Kandiyohi County property tax levy for 2023 was preliminarily certified to rise 2.9% over the 2022 levy. However, increased property values and new development will reduce the impact of that increase on individual tax bills.
WILLMAR — To create a balanced budget in 2023, Kandiyohi County is planning on increasing the property tax levy by $2,476,130 — or 2.9% — over this year's levy, to $36,363,370.
However, because of the increased economic growth and rising property values in the county, the tax capacity rate dropped seven percentage points — from 56.75% to 49.75%. This means individual property taxpayers probably won't see their county share of taxes go up 2.9%. Instead, it could be a smaller increase.
"The lower the number, the further your dollar goes," said County Administrator Larry Kleindl. "There are more people paying in."
Commissioners certified the tax levy for next year at Tuesday's meeting on a preliminary basis. The county will formally adopt the tax levy in December. Between now and then, the tax levy can be decreased, but it can not increase.
"You are locking in what the maximum amount is," Kleindl said.
The county is receiving $2,476,130 in county program aid from the state. Without that money, the county's levy would actually be $38,838,500.
"That truly is a tax savings for the public," Kleindl said.
The proposed county budget for 2023 is $83,868,400, up from $78,842,600 in 2022. Kleindl said the main reason for the budget increase is employee wages and benefits.
"The biggest resource we have is our employees," Kleindl said.
The budget proposal also plans for $600,000 being taken from reserves to help fund improvements at the Kandiyohi County landfill.
Commissioners also approved the tax levy requests from the county Housing Redevelopment Authority and the Kandiyohi County and City of Willmar Economic Development Commission. Both have their own tax levies, which are separate line items on a property tax bill.
The EDC requested a tax levy of $578,000, up $22,000, or 3.96%, over the 2022 levy. EDC Executive Director Aaron Backman said the increase will be used to help fund the Elevate entrepreneur training program and increased marketing at the EDC.
Commissioners unanimously approved the levy request, believing the benefits the EDC brings to the county — in the shape of new business projects, such as the new FedEx in the Willmar Industrial Park — is worth the county's tax money.
"This increase is very justified," said Commissioner Corky Berg.
The HRA levy will be increasing for the first time since 2017. HRA executive director Jill Bengston requested an 18.5% increase, or an additional $117,000, to raise the levy to $750,450. The increase in funds will be used to establish a Local Housing Trust Fund, add an administrative assistant position to the agency and make adjustments to employee wages.
Bengston said she knows the increase is more than the commissioners probably wanted to see, but housing remains a huge issue in the county and the funding increase will help the HRA continue to serve the community. The levy funds only make up 8% of the HRA's revenue. The levy increase was approved by the entire board.
"There is a need out there, that we haven't had before," Berg said. "It is hard to swallow, but I support this."
Over the next several weeks county staff will continue working on the budget, for which the process started back in May. While the levy increase is a bit higher than in years past, rising inflation and increased costs shaped the board's decision.
"I think we have a good budget and I appreciate your work, Mr. Kleindl, and (that of) all the department heads," Berg said.