The Blue Earth City Council held their annual Truth in Taxation Hearing during their regular meeting on Monday, Dec. 2.

After the Truth in Taxation Hearing the council did not pass a motion to set the budget and levy, but postponed that decision until their Dec. 16 meeting.

This past Monday the council took a pause in the regular meeting at 6 p.m. and mayor Rick Scholtes opened the Truth in Taxation public meeting.

Scholtes went over the 2025 budget and explained how the budget, added to the amount of debt service needed, creates a total amount of expense. He also went over the types of income to cover the budget and debt service, including Local Government Aid (LGA) from the state.

The rest is covered by local property tax, Scholtes explained.

This year’s local property tax needed by the city was $1,967,000. For next year, in 2025, that amount is at $2,450,000. That is an increase of $483,000 or 24.56 percent.

The property tax levy of $2,450,000 is made up of $1,090,000 for general/operating budget and $1,360,000 in debt payments.

Several local homeowners and business owners were present at the Truth in Taxation hearing and questioned the dramatic increases on their proposed property taxes for next year.

Some reported their property taxes going up by 280 percent or more. Mayor Scholtes said a big part of that increase is due to the estimated market value of their buildings, which was raised by the county and state.

“We don’t have control over those values,” Scholtes said. “And the state says they have to be between 90 and 105 percent of what commercial buildings are selling for in the county.”

He added that property owners can question the valuation of their buildings at a meeting on April 14.

The business owners said they understood that situation, but still wanted the council to do what it could with a 24.56 percent hike in city taxes.

Becki Steier, a Blue Earth business owner, said the city has to stop spending and increasing the city’s debt load.

She specifically mentioned the tennis court project and the new city hall, among other things.

“We can’t pass on these higher taxes to our customers and make them pay more,” she said. “You need to watch your budget like we have to. Did we really need a million dollar new City Hall?”

Noel Johnson, who owns several properties in town, said he understood that the city can’t control the property valuations.

“But you need to have a plan for the future, to help keep businesses here,” he said. “Right now I feel there is no incentive to stay in business here. It is disheartening.”

Johnson also mentioned that he was disappointed that his furniture business was not asked to give a quote for the new furniture being purchased for the new City Hall.

Both Steier and Johnson also mentioned the proposed Tiny Houses, which could cost $2 million to build and will put the city further into debt, they said.

Mayor Scholtes responded that even if the taxes were lowered this year, the amount would have to be increased again next year, more dramatically.

He also pointed out that in a couple of years the city will start paying off some of the bonds that comprise the debt.

Council member Mike McNerney pointed out that 80 percent of the debt is for the streets and all the infrastructure under those streets.

“This last project was split into thirds to keep the total down,” he said. “We are getting close to completion of the street projects.”

Other business owners also spoke up at the Truth in Taxation meeting.

Franz Scholtz reported his taxes were up by nearly 100 percent and said his business is on a non-paved street that is not maintained or snowplowed. His building is also not connected to city sewer.

The hike in taxes is “disheartening” he said.

Business owner Kevin Krieger said his property taxes were going up 280 percent at his business.

“I don’t know how a business is expected to pay that kind of an increase,” Krieger said. “It would be nice to have seen it done more incrementally.”

After an hour and a half of discussion, which sometimes got heated, the Truth in Taxation hearing was closed and the council returned to their regular meeting.

After discussion of whether to pass the budget, and the increased property tax levy amount, council member John Huisman made a motion to delay making a final decision on the amount of the levy until the next City Council meeting on Dec. 16.

“I think we need time to take another closer look at the 2025 budget and see if there are areas we can cut,” he said.

The motion passed.