Policy Blog

I have bought and sold property many times over the years. When buying property I have learned that one should always remember it is easy to buy and hard to sell – as such, you should aim to buy at a price you can afford over the long haul. The problem, as we all know, is many people bought at the top end of what they could afford. Many are now underwater. Count your blessings if you bought at an affordable price.

Governments are no different. They often buy things at an inflated price. They set their levies at the maximum of what they can spend rather than at what they should spend. All is well until they experience an unexpected decline in revenue. Then all hell breaks loose, which means the taxpayer is on the hook. All too often this is exacerbated by the fact that the taxpayer is experiencing his or her own budget shortfall at the same time.

Compliments are in order for St. Louis County and the City of Duluth for suggesting that this is not the time to significantly raise property tax levies. County Commissioner Dahlberg proclaimed that “no increase” was what he thought most appropriate. Similarly, Mayor Ness suggests a 2.9 percent increase– and that only to pay for the new police station to replace the 1920’s version currently in use. After all, if you are going to increase taxes it is hard to complain about providing new facilities for cops who face danger everyday keeping public order.

Of concern in the levy debate, however, are Councilor Hartman’s comments in the Duluth News Tribune. He suggests we commit to the “allowed maximum” levy increase, see Duluth News Tribune, Councilor Says City Should Make Room to Raise Levy, Friday, September 30th. He wants to see what might happen with the state’s budget before committing to no increases. In some ways one might say this is thoughtful. However, the precedent in politics will – at the end of the day – dictate we tax up to the allowed maximum.

Councilor Hartman is well intended. To be sure he is a popular fellow around town. However, business owners and operators would be wise to remind him, and any of his fellow councilors - who might be of the same mindset, that these are challenging times. Businesses do not have the ability to “price up” their goods, or services, to make sure their bottom lines are protected in a tough business climate.

Last year the Chamber board of directors charged the policy division with “monitoring tax and fee structures at the local, regional and state level of government to ensure business is not hit with new expense in challenging times.” They wisely looked ahead and understood that business was not able to absorb increased government costs when anticipated business revenue would surely be challenged.

You can help. Email the council at council@duluthmn.gov and urge the council to keep the levy increase to a minimum on Monday evening. It’s your money. It’s your voice – help us make it be heard.