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EGF: 2010 budget 'will be cut'

East Grand Forks likely will set a preliminary city property tax increase of more than 10 percent for next year's budget, but the actual increase probably will be lower.

East Grand Forks likely will set a preliminary city property tax increase of more than 10 percent for next year's budget, but the actual increase probably will be lower.

That's what City Council President Dick Grassel told fellow council members during Tuesday's meeting, where the 2010 proposed budget was once again brought up.

The council will vote Tuesday on setting the preliminary levy increase that could be as high as 12.8 percent for the city's portion of property tax bills. But Grassel said there's still a long way to go before the budget is set, and adopting the maximum allowed increase gives city leaders more room to work during the budget process over the next few months.

"We work through that budget at a number of meetings, and we do cut a lot of things out," he said. "I'm not here to increase my taxes by 12.8 percent either. This isn't something that we like to see done, but it has to be done in order to keep the services and things that people want to see."

Grassel said items in the budget "will be cut" before it is finalized in December. But the amount of downsizing that needs to happen won't be determined for at least a few weeks, he said.

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Tough decisions

A 12.8 percent increase, the maximum allowed for East Grand Forks under state law, would add about $103 of city taxes to a $150,000 single-family house next year. But City Administrator Scott Huizenga reminded the council that even the maximum increase only would recover about $328,000, still less than the $420,000 the city will lose in local government aid funding from the state in 2010.

The proposed budget already is accounting for that shortfall by reducing expenditures -- the city would spend about $8,272,000 under the proposal, more than $60,000 less, while this year's actual expenses are projected to be about $8,334,000.

Council member Greg Leigh said he doesn't favor the maximum property tax increase and wants to work at reducing it over the coming months. "I think it's important for the public to know that we, as a council, are really trying to hold the line on spending," he said.

He encouraged residents to attend public forums during the budget process so council members can get an idea of possible services to reduce or cut for savings.

Council member Marc DeMers suggested holding public budget forums at the end of September to allow each of the city's five wards to meet and discuss what to do. The city is obligated to hold one public forum in December, but this would "still give people enough time to voice their opinion before we're at the drop-dead point" before the budget has to be adopted.

Jerry Lucke, the city's finance director, said the proposed budget is simply substituting local government money for the state's cutbacks. "You're holding the line on spending. Your taxes are going up almost entirely because the state is reducing the amount of funding they're going to provide."

Reach Johnson at (701) 780-1105; (800) 477-6572, ext. 105; or send e-mail to rjohnson@gfherald.com .

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