Council sticking with 7% levy bump

City of Tracy Finance Director Krista Listul goes over an item of the City’s proposed 2022 budget at a special meeting of the city council on Wednesday. Photo / Per Peterson

By Per Peterson

With the City of Tracy looking to make significant community investments sooner rather than later, it appears as if the proposed 7% tax levy will become a reality when the 2022 budget is set later this year.

During a special meeting Wednesday, the Tracy City Council once again discussed increasing the tax levy to 7%, significantly higher than its traditional 3% tax hike and came to a consensus that the 7% increase will be needed to help pay for capital improvement projects.

The preliminary budget, if approved in September, totals $14,626,573. About half of that — $7,319,673 — goes to Public Works because of the street project, and another $4,863,716 to Administration; that includes all of the City’s debt service payments as well as deputy registrar costs.

“As a city council, you’ve had some pretty aggressive goals, so we’re working to really maximize our community investments wherever we can; we think this is a pretty good year to do that,” Tracy City Administrator Erik Hansen said at the meeting.

Mayor Pro Tem Seth Schmidt said a 7% local property tax increase does not necessarily mean property taxes will increase at that rate in Tracy.

“That’s correct,” said Hansen. “Obviously the school district and the county are collecting taxes; the other thing is that assessed valuations also go up this year, and you have additional property that’s being taxed. It’s not going to be a 7% increase in your taxes — it’s going to be a significantly lower number than that — less than half, I’m sure. That’s going to depend on your home value, too, because some home values went up and some didn’t.”

Schmidt called the proposed 7% levy increase reasonable at this point, since the proposed levy can be lowered but not increased.

Council member George Landuyt said it’s unfortunate the current council is facing the reality of doubling the current levy, simply because past councils failed to keep pace with rising costs and issues in town.

“Just the cost of everything’s going up,” he said. “(Past councils) didn’t get their heads wrapped around that, I don’t think,” Landuyt said.

Two years ago, council member Jeri Schons said the council did set the preliminary budget at 7%, and the final levy was set at 3%.

“I don’t want to say that the council wasn’t looking at things, they just prioritized that they did not want to increase taxes, because that was a big complaint of the citizens,” Schons said.

“It still is,” replied Landuyt.

“We have to start improving things, otherwise we’re not going have stuff to improve,” said council member Dave Tiegs.

Hansen said now seems to be the right time to make those investments because the City’s debt service levy is expected to decline in 2022 with the retirement of the 2016B bonds, before a significant increase the following year because of the refinancing of the 2019 temporary bond for the Phase 3A street project into a long-term USDA bond of $8.4 million.

See this week’s Headlight Herald for more on this article.