DULUTH — The Duluth City Council is taking steps to reduce a proposed property tax levy hike.
City administration presented an 8.9% increase in September, citing rising health care costs among the reasons.
Monday night, after a flurry of potential changes offered during three hours of deliberation, council members approved an amended approach that would reducethe increase by 1%, trimming about $383,000 across city departments. A final vote on the 2023 budget is set for Dec. 19.
City commitments to paying higher police wages and costs for a crisis response team last year were part of an expected 15% levy increase for 2023. Instead, about $3 million in American Rescue Plan Act money would offset that by paying for one-time purchases, putting the city's initial number at 8.9%.
Dueling amendments emerged Monday to further reduce that: one that would use more Rescue Plan money, along with cutting a position and taking money from the city's new Housing Trust Fund; and one that would make permanent cuts to the city budget by eliminating several open positions.
Using more one-time Rescue Plan money to reduce the budget is "smoke and mirrors that we'll end up paying for next year," said Councilor Roz Randorf.
She blamed an "unrealistically amazing" health care plan for the city's predicament.
"I know these decisions are not easy, but what is clear is we cannot continue to pass along the rising costs of running this city to our citizens," Randorf said.
Chief Administrative Officer Noah Schuchman pushed back on Randorf's initial proposal of a 2% reduction to the proposed increase, saying any city "fat" is long gone, cut in the 2000s.
"A cut of this magnitude is not something easily absorbed," he said, resulting in reduced services to citizens. "It would be felt, and felt deeply."
Councilor Janet Kennedy offered an amendment that amounted to a 1.2% reduction.
The city's finance director has said an increase in the property tax levy in 2024 could be as high as 17% because of growing health care expenses and wages.