Taxpayers feel pain of city levy increase

Despite being sympathetic to citizens who can’t afford higher taxes, Cloquet city councilors unanimously passed an 11.23-percent property tax levy increase Tuesday, an increase of nearly $398,000 over last year’s levy.

“This is the cost for the level of service that we have right now,” said city administrator Tim Peterson. “If we want to decrease the level of service, that will lower the costs that we have presented in front of you, but this is what it costs to have what we have right now.”

Peterson focused much of his explanations Tuesday on the city’s general fund, which covers most of the city services: police, streets, the public library, parks, community development, finance and administration, plus capital purchases such as dump trucks. Wages make up just over $6 million of the entire general fund budget of $9.5 million, Peterson said.

The higher budget wasn’t exactly a surprise after council members approved increased pay for the police department in June of roughly 11 percent for this year — including a pay raise of 6 percent plus a “market adjustment … equivalent to 5 percent of the top patrol pay,” Peterson explained earlier this year.

Three people spoke during Tuesday’s Truth in Taxation hearing, all of them stating that their property taxes had increased dramatically since 2020.

Nicole Milewski said the tax increase felt “insurmountable” to her family. When they purchased their home in Cloquet in November 2020, they were careful, planning to pay extra on the principal each month so they wouldn’t be making mortgage payments in their 70s, she said. The first year of payments were manageable, with utilities and mortgage coming in under $1,000 a month.

“We were hopeful, excited and confident in our choice to purchase our home, work and live in Cloquet but that dream is slipping away in just four years,” she said. “Rising profits, taxes and insurance rates have pushed our mortgage payment to nearly $1,500 a month, leaving us struggling to afford the home we’ve worked so hard for. In four years, our monthly housing costs without utility hikes have increased by about $500 a month, while our rate of pay has not increased anywhere near that much.”

Now they’re barely able to cover the minimum payment on their mortgage, Milewski added, nearly in tears.

A school district employee who recently received a 50-cent hourly raise, she has to work two additional jobs to make ends meet. She acknowledged that her school wages also come from tax revenues.

“This puts me and many others like me in a terrible position, caught between needing tax revenue to fund essential services and being priced out of our homes by the very increases that make those services possible,” she said. “We love our home. I love my job, and we love the city of Cloquet, but something’s got to give.”

Other residents suggested growing small businesses and looking for alternative funding such as grants to ease the pressure on homeowners.

The citizen input ultimately sparked a lengthy discussion between the city councilors and Peterson about how the city could corral rising costs in the future.

Ward 2 councilor Sheila Lamb again pointed to the hockey arenas, noting that the levy increase would be closer to 4- or 5 percent without hockey expenses.

Peterson pointed to repairs and electricity for the increased arena costs. He also pointed out increases at the library.

Lamb was persistent.

“Every individual in our city can utilize that library, regardless of their age,” she said, citing programs and meetings for preschool through senior citizens. “That is communitywide, where the hockey arena is for a set amount of people who are able to utilize it. For me, that’s where the line starts to separate.”

But the fact remains that wage and benefit increases drove the majority of the budget increases, as Peterson said. Police department expenses make up 47 percent of the general fund expenditures, with public works in a distant second at 23 percent.

Ward 4 councilor Kerry Kolodge — a retired police officer — asked about the police wages, but also talked about how difficult it is to hire police officers today.

“Trying to … entice people to work here and then retain them, that’s the biggest thing that’s changed in my time,” he said. “Every dollar, every nickel we spend, comes out of the taxpayer’s pocket. To retain the employees in the police department, we had to raise the taxes.”

Even with the raises, Cloquet still lost several officers to other local departments offering more-generous salary packages and is seeking to hire more officers.

Other city employee groups negotiated raises of 5-, 4- and 3 percent over three years (2024-26), which led to budget increases mostly between 3- and 4 percent for next year. The library was the exception, with an expected budget increase of 8.6 percent.

There are other areas where costs are rising. The swimming pond is budgeted for an increase of $27,400; the hockey arena an increase of $36,000. Parks will get $25,250 more.

Peterson also pointed to hopeful economic signs: the renovation of the Solem Hotel property, greater interest in the Cloquet Business Park, new high-speed broadband access in the northern part of the city.

Councilors talked seriously about getting rid of the swimming pond — which lost $32,000 this year — because it’s drawing fewer users and is often closed because of weather. A splash pad would be much cheaper to maintain, Peterson said, but the city would likely have to bond for more money to change the pond into a splash pad … a move that could make the bandshell more accessible for performances, he said.

For this year, however, it was too late for cost cutting measures. Ultimately the council and mayor Roger Maki — who shared his own struggles with rising taxes as a senior citizen — voted unanimously on the levy increase, next year’s budget and a tentative five-year capital improvement plan.