Local mayor wants to return overtaxation to residents.
While many Minnesota cities and towns face budget shortfalls, deficits and decreasing tax revenues, one local mayor is facing a different kind of financial challenge - what to do with the city’s surplus.
Mayor Mike Myser of Prior Lake, MN has been making state news recently as his city has been running a bloated surplus in its general fund.
According to Myser, the city has been running large surpluses over the last several years due in part to a 15 per cent increase in property taxes over the last 3 years. Under budgeted building permits also played a role.
Prior Lake Tax Surplus
2008 $469,000
2009 $547,000
2010 $979,000
The extra money has been placed in the city’s reserve fund that works much like a “rainy day” account. Should there be an emergency need, city council can tap into the fund. Currently, Prior Lake’s reserve is in excess of $7 million. The State of Minnesota recommends a reserve equal to 40-50% of the municipality’s operating budget, which would only be about $5 million. Myser believes that amounts to overtaxation of the city’s residents and businesses.
Myser learned of the massive surplus in January and said it was a shock. At a December City Council meeting, city staff reported an estimated 2010 budget surplus of $380,000. Just a few weeks later it was reported to the council that the actual surplus was nearly $1 million.
The mayor began making waves at city council meetings for suggesting that the taxpayers of his city deserve a refund for overpaid taxes. Some council members and City Manager Frank Boyles don’t agree, saying to the local city paper that it would be difficult to find all of the taxpayers and that there projects the city would like to tackle with the extra money.
Freshmen council member Vanessa Soukup told the Prior Lake American in response to Myser’s suggestion, “You’ve talked about how good, honest, transparent government should be key, [But] these things were brought for public opinion on the news. The council should have been aware of this.”
Though it may be an uphill battle, Myser is sticking to his guns claiming he will continue the discussion at future council meetings.
“There is an open and transparent, very public budget process in place. We rely on city staff, the City Manager and others to provide us with accurate details to create the budget,” said Myser. “The council plans how much to spend and what to spend it on for the upcoming year based on review of those details. We have discussions, bring preliminary budgets to the public for input... It’s an involved process. If we use the surplus dollars on other projects, we are circumventing that process, and we will lose the trust of the residents.”
Myser has received criticism from the local newspaper as well as some city council members for statements made to several news outlets including the Star Tribune and MyFox9. Council members claimed they were unaware of his intent to return the tax dollars. His tax cutting plans should come as no surprise though as Myser promised to tackle taxation during the 2009 mayoral campaign where he defeated Steve Millar who was a city councilman at the time.
The City of Prior Lake is a quaint community located south of the Twin Cities and is home for roughly 23,000 residents, a jump from 16,000 residents estimated in the 2000 census. It is the eighth fastest growing city in Minnesota.
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