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Politics & Government

Minot city manager explains property tax increase to state lawmakers

Dave Thompson
Prairie Public

Minot’s city manager said after years of low property taxes, the city was forced to raise property taxes substantially in 2017.

The oil boom brought with it substantial growth in city sales taxes, and increases in property valuation. That allowed the city to drop its mill levy in 2011. But city manager Tom Barry told the legislature’s interim Taxation Committee – a number of things happened when the oil play slowed down.

"Sales tax revenues were down 30 percent over the last coupld years," Barry told the Committee. "Property tax valuations were down 8 percent last year. State aid reduction was 20 percent over 5 years, and that has finally caught up with us. We've also had a 22 percent reduction in Hub City funding for oil and gas growth impacts."

Barry told the Committee the city has had to use $7 million in reserves for the last three years or so.

"That reserve money is one-time money," Barry said. "Once you spend it, it's gone."

Barry told the Committee Minot is still facing some significant challenges.

"As we re-initiate the Northwest Area Water Supply Project, since that's looking like it's going to come out of litigation, we have to find money to complete it," Barry said. "And there's the flood control project. We have enormous financial needs to build both projects. And we don't have the revenues to do it."

Barry said there’s another big challenge. The city annexed a lot of property, and installed water and sewer to those properties in anticipation of a need for more housing. But he said with the slowdown, that influx hasn’t happened.

"I think we have something on the order of about 2800 single-family lots," Barry said. "They're ready to build on. They have the infrastructure. But they're empty."

Barry said there are no property taxes yet from those proprties. But he said the city still has to maintain water, sewer, curb and gutter in those areas.

"That's a big challenge for us," Barry told the Committee.

Barry said the city also made cuts. He said in the current fiscal year,  the budget was cut by $5 million; 20 staff positions were eliminated; staff raises were cut in half; and the city’s $3 million facilities budget was eliminated.

The interim Committee was assigned a study of property taxes.

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