Minutes - Council - 07/13/2021 - Laserfiche WebLink

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Mayor Kuzma stated that if raising taxes is not going to be part of the discussion or process, then budget cuts would be needed to hold the levy to a certain amount. He stated that he would have preferred to go through the budget process and look at the alternatives before making a motion to repeal this. Councilmember Heineman asked if returning to dirt roads and reducing funding for police were options included in the previous discussions. Mayor Kuzma commented that many options were discussed during that seven-year process with multiple Councils. Councilmember Howell commented that she has strong beliefs and views which are different than the Mayor, that is not playing politics. She stated that Mayor Kuzma played politics with her in May and his comments related to cutting police funding or returning to dirt roads would be considered playing politics. Councilmember Specht stated that when they look at the big picture, the last Council raised taxes significantly by adding the franchise fee. He stated that the issue is not increasing taxes, as that was already done. He stated that he is looking for the most fair and equitable method to do so. He noted that 70 percent of homes are paying more in franchise fees than they would through property taxes. He stated that property owners can file for a property tax rebate at the end of the year but that cannot be done with franchise fees. He stated that unfortunately some things will need to be cut and taxes will need to be increased in order to finance the roads. He believed that it would be much fairer and more equitable to fund roads through the levy versus franchise fees. Councilmember Heineman stated that he used data from Anoka County and a few other sources. He stated that the franchise fee is a tax increase. He reviewed what a home of a certain value would pay under franchise fees and what it would pay placing that on property taxes. He stated that his data shows that 81 percent of residents would save money placing the road financing on the levy versus the franchise fee. He stated that the franchise fee is a regressive tax, where people with lower value homes pay more for their house value than people with higher value homes. He stated that he supports proportionate taxing. He stated that he does have a plan he hopes to share at the next worksession. City Administrator Ulrich reviewed the action before the Council tonight. Councilmember Woestehoff commented that Councilmember Specht is correct in that the revenue generated by the City through franchise fees did increase to support the $1,900,000 needed for roads. He believed that it is more efficient and cost effective to finance roads through the franchise fee. He noted that there are 440-500 exempt properties that pay a franchise fee that would not pay a property tax. He stated that there are 103 different versions of why a home or business would not pay a property tax, but they still use the roads. He stated that the reasoning that because he finished his basement means he drives more and should pay more for roads does not make sense. He commented that the terms used such as regressive or proportionate taxing is more linked towards income tax rather than property tax. He stated that his biggest concern is that this would repeal this method for road financing and then plan to discuss alternatives in the future. He stated City Council / July 13, 2021 Page 8 of 11