Brainerd approves 2% 2025 levy increase on 4-3 vote

BRAINERD — Brainerd’s levy will increase by 2% in 2025.

City Council members voted 4-3 for a $7,089,160 property tax levy during their meeting on Monday, Dec. 16, with some voting in opposition due to the levy for the Brainerd Lakes Regional Airport.

The final levy is lower than the preliminary September number, which was set at an increase of 8% over this year. Since September, staff has updated the budget based on actual revenues received throughout the rest of the year and has reviewed expenditures to update any previous assumptions.

Council members could have chosen to use $113,188 in the city’s fund balance to offset the levy, requiring an increase of only 0.36% for a perfectly balanced budget. That money was levied in the 2024 budget, as the council was unsure of the cost of a rate study, but it was not used. Finance Director Connie Hillman told council members earlier in December they could elect to keep that money in the fund balance, knowing the city was not in compliance with its fund balance policy at the end of 2023. Not using the fund balance to offset the levy, Hillman also noted, could result in a more steady levy increase from year to year versus peaks and valleys.

The motion to approve a 2% increase Monday came from council member Gabe Johnson, chair of the council’s Personnel and Finance Committee.

“Last year was a substantial tax increase,” Johnson said, referencing the 8% levy increase for 2024. “Two might still be too high, but I know people are feeling both ways, so I think two is kind of a compromise, right in the middle.”

The 2%, Johnson noted, still gives the council some unallocated fund balance in case of instances like the hiring of an additional informational technology employee or a change of heart on the levy for the Brainerd Lakes Regional Airport.

Council member Kara Terry said before the motion was made she would not support a measure that allocates only $1,000 to the airport. The vote for the $1,000 airport levy came Sept. 16, when the council also approved the preliminary budget. Terry was absent during the meeting, leading to a split 3-3 vote to set the airport levy at $150,000. That tie was broken by Mayor Dave Badeaux, who was opposed. A subsequent motion to approve a $1,000 levy for the airport passed 5-1, with Tiffany Stenglein as the sole no vote. The action came after discussion of Brainerd residents being taxed twice for the airport by paying into both the county and city levies for its operations.

Terry asked council members Monday of the purpose behind their support of a $1,000 airport levy. Council member Jeff Czeczok said he has expressed his purpose several times. When Terry asked if he could repeat it, Czeczok again said he has expressed his purpose several times. No one else volunteered any reasoning.

Over the past couple years, council members have discussed the idea of having Crow Wing County take over the entire levy instead of splitting in with Brainerd. The county agreed in 2023 to increase its airport levy by about 6% to account for Brainerd’s share, allowing the council to reduce theirs by the same amount. When approached earlier this year about having an ownership discussion about the airport, county staff indicated they were not interested, though Commissioner Steve Barrows has since said the county is willing to have the conversation, though the last request came too far into the budget process.

“Without the increased airport allocation, I will not be voting in favor of the levy,” Terry said Monday.

Stenglein said she shared Terry’s concerns, feeling like only $1,000 undermines the work airport staff does and the value gained from the airport. However, Stenglein said she was not willing to throw the whole budget and levy away because of that one issue.

“I will take my half a loaf of bread on this one,” Stenglein said.

Kevin Stunek, council liaison to the Airport Commission, said he would also oppose the measure because of the airport levy.

“I really struggle with this. I think $1,000 is peanuts,” Stunek said. “... I just have to support the airport as the liaison out there and the staff and the people.”

Council member Mike O’Day said he would support the 2% levy increase. While noting the $1,000 for the airport is a statement, O’Day said it is the best option and an offer of good faith to stay in the conversation.

“It’s $1,000 to still be part of it. Do we have to be part of it? From what I’ve learned, we don’t,” O’Day said. “And I’ve also learned that our airport has a very high fund balance that’s been contributed to far more than what we’ve needed to for I don’t know how many years. So as we learn more about this and move further into the future and have these conversations — if the county is willing to have them — there are plenty of options for the airport to get funding.”

The motion to approve the levy passed 4-3, with Terry, Stunek and Council President Kelly Bevans opposed.

THERESA BOURKE may be reached at [email protected] or 218-855-5860. Follow her on Twitter at www.twitter.com/DispatchTheresa .