Tax rate down, tax levy up
New London considers ‘status quo’ city budget
By Robert Cloud
If enacted, the city of New London’s property tax rate will drop from $8.96 per $1,000 of value in 2021 to $8.43 in 2022.
The city’s general fund tax levy is expected to increase by less than 1% in 2022, according to information discussed at a city budget hearing on Oct. 13.
Noting the minor increases, City Administrator Chad Hoerth described the proposed budget as “pretty much status quo.”
Although he sees the small increase as a positive sign, Hoerth said the budget comes with its own challenges.
Hoerth said in his budget memo his “largest concern revolves around our staffing levels as it relates to the ever-increasing expectations for increased public services and the growing requirements from unfunded state and federal mandates.”
At the budget hearing, Hoerth said, “Looking forward, it is no secret that filling and retaining our quality employees has been and will continue to be a major challenge.”
New London is competing with larger cities and private organizations for quality employees, Hoerth said.
The 2022 budget includes a 2.5% wage increase for all general full-time and permanent staff, Hoerth said.
New London will pay $833,959 in debt service in 2022, according to Finance Director Judy Radke.
“If we never took out another loan, we would be completely debt free by the year 2040,” Radke said.
Radke said New London’s total debt is currently $10.29 million.
The city has a total equalized value of $450 million, which gives it a debt capacity of $22 million.
However, Radke said the city’s debt is about half of its capacity.
“We are very fortunate that our debt is much lower than a lot of communities,” Radke said.
Under state law, there are only two ways for the city to increase its revenues: debt and net new construction.
In 2021, New London had only $24,000 in net new construction.
Comparing municipal debt to household debt, Radke said that while it makes sense for a household to pay off all its debt, city debt is actually healthy since it pays for growth and infrastructure.
She also noted that New London is currently paying low interest rates on its loans.
The general fund levy for 2021 was $2.93 million.
New London’s levy for the proposed 2022 budget is expected to increase by $24,638 to $2.96 million.
Total operating revenue is increasing by $87,569 to $4.8 million in 2022.
The higher revenues are due in large part to highway aids increasing by $22,485 to a total of $625,893 in 2022.
Total General Fund operational expenses for the year 2022 are budgeted to increase by 1.37% or $108,627 out of a total budget of $8.06 million.
Most of this increase is attributable to increased insurance costs, changes in family insurance and wages.