By Tim Douglass

tdouglass@pctribune.com

Glenwood City Commissioners last Tuesday reduced the final 2023 budget which reduced next year’s levy increase from 9 percent to 8.5 percent.

City Administrator Dave Iverson told commissioners he had reduced the preliminary budget submitted in September by almost $89,000 to create the final budget requiring an 8.5 percent increase in the 2023 levy.  

The final budget and levy had to be approved before December 27.  The city did conduct a Truth in Taxation hearing before the final budget was considered and approved. No one from the pubic spoke at the Truth in Taxation hearing.  

The resolution adopting the final budget included a general fund of $1,910,058; a tax Abatement for Midwest Machinery for $9,810 and bonded indebtedness of $107,716.  The total 2023 levy was $2,027,584.

At the meeting, Iverson also pointed out how the city has been hurt financially by stagnant Local Government Aid (LGA) from the State of Minnesota.  Glenwood, like all cities in Greater Minnesota, receives state LGA each year.  The problem is that the amount the city received in LGA has decreased since 2009 with only slight increases coming in 2021 and 2022. 

In 2009, the city of Glenwood received $703,304 in LGA from the state.  In 2022, the city received $722,030.  That rate is about the same as the amount the city received 20 years ago in 2002.  

Iverson said that had the state just provided a 2 percent increase (about the cost of inflation over the past 14 years) the city would be receiving about $196,925 more in LGA and the total LGA would be at about $918,655.  “That’s adding simple interest, not compounded interest,” he said.  

LGA was first approved by the legislature to help small cities who don’t have the property value to be able to fund adequate police officers, as well as purchase fire and police equipment.  Although those costs have risen each year over the past 20 years.  LGA has not.  “That means more of the expense is being carried by local city taxpayers,” Iverson said.

He said the city is part of the Coalition of Greater Minnesota Cities, a group that does lobby for increased LGA and other issues that affect cities in Greater Minnesota.  It is hoped that with the surplus this year, the Legislature can make a significant increase in LGA, Iverson explained.