Rochester City Council Approves Cap for 2024 Tax Levy Increase

Rochester, MN (KROC-AM News)- The Rochester City Council took another step towards finalizing the city’s 2024 budget Monday night. 

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Minnesota law requires local governments to set their maximum tax levy increase before the end of September. Local governing bodies can lower their proposed levy increase before finalizing their budgets in December. 

On a 6-1 vote, the council approved capping next year’s tax levy increase at just under $101,531,000 or 9.44% to support a preliminary Operating and Capital Budget of just over $575,407,000. Monday night’s vote also set a December 4 public hearing date for the city’s proposed budget. 

Councilmember Molly Dennis was the lone nay vote on moving the process forward. She criticized the city’s budget process claiming it lacks transparency and accused the city of condoning wasteful spending and failing to host a competitive bidding process for lowest possible cost for city projects. 

Councilmember Shaun Palmer pushed back on Dennis’s accusation on the city’s bidding process, pointing out state law requires cities to host bidding processes and that Rochester complies with the state law.

Councilmember Patrick Keane said he’s researched accusations of malfeasance in the city budgeting process over the past year and that has only found a dead ends. “It is not happening and if it were it would be discussed up here and there would be repercussions,” Keane said.   

The proposed 9.44% tax levy increase is above the 5% increase the city typically plans for to keep up with rising labor costs and price increases fueled by inflation. Monday’s agenda item listeds the following reasons for the proposed larger than usual increase: 

• Increasing personnel costs related to labor contracts for existing personnel; 
• Funding the cost of worker’s compensation and health insurance costs related to Post Traumatic Stress Disorder (PTSD) claims; 
• Accomplishing the first step of the evolving Fire Response model; 
• Integrating organizational health and wellness to help retain and attract employees while mitigating future worker’s compensation claims. 

A news release recapping the budget proposal that was issued in August says the proposed 9.44% property tax increase is, “ spread across properties based on the value construction will absorb the tax adjustment first and then other properties will absorb based on category (apartment, commercial, residential, agricultural, industrial, etc.) proportionately to how assessed value for the category and each individual property has changed.”