East Grand Forks leaders are beginning to answer the city’s $588,000 budget question.

City Council members informally agreed Tuesday, Sept. 10, to plan for a 5% increase in property tax revenue in 2020. That decision doesn’t necessarily mean property owners will be asked to pay 5% more to the city because East Grand Forks’ tax base is expected to grow as well, which means the increase would be at least partly due to more taxable properties within city limits.

“I’d anticipate the number five would make it so that my city share of taxes would probably go up 2%, plus or minus,” said Mayor Steve Gander, who flashed a pen to jokingly suggest he might veto a higher tax increase. “And I think that’s excellent to hold it at about the rate of inflation and hold services at a high level.”

According to documents supplied to City Council members at Tuesday’s meeting, city staff expect to spend another $508,000 next year from East Grand Forks’ general fund, but City Administrator David Murphy plans to meet with city department heads to whittle down that figure.

And with the 5% figure more or less agreed upon, the city expects to bring in another $278,000 worth of property tax revenue, license and permit fees and state aid.

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Put together, those projections would presumably mean a $230,000 budget deficit next year, but council members are also considering ways to spend a $588,000 surplus from 2018.

And that money is a large part of East Grand Forks’ budget talks for 2020. Some of it presumably will be eaten up by whatever’s left of the projected deficit after city staff lower their anticipated spending hike. The rest, in City Council members’ estimation, could go toward a Bygland Road roundabout, another bridge to Grand Forks or buy down city debt.

City staff estimate the city would need to look for a 9.5% to 10% increase in property tax revenue to eliminate the projected deficit that way.

The preliminary levy City Council members are expected to set next week would be the high-water mark, so to speak, for any planned property tax increase. When council members set a final levy in December, whichever figure they choose can be equal to or less than -- but not greater than -- the figure they set in the fall.