Marion approves tax increase
Staff writer
In a double-whammy Tuesday, Marion City Council unanimously approved its proposed 2027 budget exceeding the city's revenue neutral rate by four mills.
A handful of members of the public attended back-to-back budget hearings, but none spoke during public comment.
At $8.2 million, Marion’s budget will increase by more than $1.2 million over this year’s estimate. Of that, $1.09 million will come from property taxes.
Although increasing tax revenue by four mills, the estimated mill levy will increase by only three, from 70.712 to 73.712.
This is expected to bring in $63,000 more in property taxes.
Assuming no increase in valuation, even though many valuations do increase, a three-mill increase would cost $34.5 on a residential building with an assessed value of $100,000. A commercial property valued similarly would have to pay $75 more.
Utility rates also may increase, accountant Scot Loyd suggested.
Marion elected to split its utilities — electric, water, refuse, and sewer — into separate funds for the 2027 budget instead of one lump fund as it has in past years.
The problem with using utility money from one fund, Loyd said, escalated because the revenue neutral rate “locks the dollars in for the previous year.”
“It’s very important to get them separate like that,” he said, “to be able to be just like a business, ‘Here’s what’s coming in, here’s what’s coming out.’ If we have no cash that means the rate needs to be raised.”
Having “strong” utility funds, Loyd said, would help keep the mill rate down in the future.
A utility rate increase hasn’t been proposed yet, but city administrator Brian Wells has ordered a study that would factor in cost of operation and production, including what it costs to buy electricity as well as any debts.