moorhead city council

Nancy Edmonds Hanson 

Moorhead’s preliminary budget for 2023 Calls for spending totaling $18.9 million, city finance director Jenica Flanagan told the City Council at its Sept. 26 meeting – an increase of almost $2 million largely driven by increases in wages and benefits. Of the rest of the increase, the largest amount, or 20% of the half-million-dollar total, is attributed to motor fuels.

That means that the budget, if it receives final approval at year’s end, will require a residential property tax increase of just under 3%. That’s substantially less than the increase of almost 5% passed in 2022. The city’s portion of the tax on a median home valued at about $211,500 would be about $27 for the year.

The tax on business and commercial property, however, would continue to be capped at 1.6% unless there is an increase in the assessed value of the property. According to the finance director, the state picks up the difference between that cap and the overall tax rate, reimbursing the city.

She detailed increases in the tax value of property across the city, ranging from more than 10% for residences due to improvements and market value adjustments, to 2% in the value of apartments and 3.18% for business and commercial facilities — an average of 8.4%. Overall, the changes add about $3.7 million to the city’s tax capacity.

Taxes are expected to make up only 37% of the general fund revenue supporting the 2023 budget, Flanagan pointed out, with the total amount of general fund revenues proposed for 2023 totaling $36.5 million. Another 25%, or $9.25 million, is expected to be transferred from Moorhead Public Service utilities. Local government aid paid by the state accounts for 20% ($7.4 million), with all other sources representing about 18%, or $6.4 million.

The largest item in the budget is the police, about $12 million, and fire, about half of that amount. Administration accounts for about $5 million. Other costs include public works, $4.6 million; engineering, $2.9 million; parks and recreation, $2.5 million; community development, $2 million, and governmental affairs and prosecution, $1.4 million.

City taxes, she noted, are just one component of property owners’ total tax bill. Of their tax dollars, Clay County received 38 cents in 2022,the city 34 cents, the Moorhead School District 26 cents, the watershed district one cent, and the Economic Development Authority and Housing Rehabilitation Agency sharing the final one cent.

City manager Dan Mahli noted that the council will be receiving public comments during its meetings in October and November. The final vote must be taken by the end of November, with final adoption at its meeting Dec. 12. After September’s unanimous vote to accept the preliminary budget, changes can still be made to reduce the amounts; the total cannot be raised.