City budget increase of 3.2% approved

The Eden Prairie City Council on Tuesday, Dec. 6, approved a 2023 city budget that is 3.2% higher than this year’s and a 2023 city property tax levy increase that is up 4.5%.

But, because of variables that include a steep rise in home values as a result of a red-hot housing market in 2021, the 2023 city tax on a median-value Eden Prairie home, $513,200, will actually go up 7%.

For a city budget that is $57,395,407 and a property-tax levy of $42,432,263, that’s a 2023 city property tax of $1,524, up $100, for the $513,200 home.

Of the $120.47 per month in property taxes that would be dedicated to the city’s general fund, $39.76 would be for police services and $32.53 would be for parks and recreation, the city staff estimated Tuesday. Lesser amounts of the monthly property-tax bill would go to fire services, public works, administration, and community development.

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Two residents spoke at Tuesday’s public hearing: Greg Olson, who lives on Ann Court, and Cascade Drive’s Craig Armstrong. They urged greater transparency and detail leading up to the council’s decision on a new budget and tax levy. Following comments, the budget and tax levy were approved on a 4-0 vote.

The city’s share of the total property-tax bill paid in Eden Prairie is 26%. The Eden Prairie School District’s share is 35%, and Hennepin County’s is 31%. The county held its budget and tax levy hearing on Nov. 29, while Eden Prairie Schools will hold its on Dec. 12.

General-fund budgets typically reflect the City of Eden Prairie’s priorities for the year, as well as public opinion voiced in the resident surveys the city conducts. In both cases, there’s been an emphasis on public safety, and so the 2023 city budget holds money for an additional police officer and a fire administration position moving from part-time to full-time.

Property taxes are the single largest source of revenue for the city’s budget, contributing 77 percent of the needed funds. Charges for services are second, and license and permit revenue is third.

There is a $1.1 million difference between revenues and expenses for 2023, and the city anticipates using American Recovery Plan funding to offset the shortfall.

Overall, Eden Prairie property in the residential category increased in value 18.4%, based on sales in 2021. City Manager Rick Getschow said that number “is close to the last 5, 6, or 7 years combined,” but consistent with jumps in value in the metro area, in Minnesota, and nationwide. Eden Prairie’s commercial property increased in value 3.1%, and apartment properties increased 7%, according to the city.

The 7% increase in city property tax for a $513,200 home – the new median value in Eden Prairie – may not be the same for other homes. If you own a home that’s in the middle range of values in Eden Prairie and its 2022 value went up only 10 percent, your 2023 city tax is projected to drop 1.9 percent or $27, according to the city. If your home’s value went up 25 percent, the city tax is projected to increase $191 or 13.4 percent. 

Getschow said the city tax-levy increase of 4.5% in Eden Prairie is lower than the preliminary 2023 tax-levy increases of 13 other cities in the metro area: Maple Grove, Eagan, Woodbury, Plymouth, Minnetonka, Apple Valley, St. Louis Park, Blaine, Edina, Brooklyn Park, Bloomington, Lakeville, and Burnsville.