KROX sat down with City of Crookston Administrator Jeff Shoobridge Wednesday morning to get a little more information on the upcoming budget process. We asked Jeff to explain tax capacity so that people might understand it better when it is brought up. “A good example, if you have a residential house, this is what affects most people, is your home,” says Shoobridge. “If you have a home valued at $300,000, the tax capacity is considered 1% of that value, which would be $3,000,” Shoobridge says if your home is over $500,000, then the percentage goes to 1.25%.
Shoobridge explains how the city gets these numbers. “Every July 1, the county certifies the tax capacity and provides the cities with what they call certified Tax Capacity,” says Shoobridge. “For Crookston right now, our tax capacity is $4.8 million, which, if we assessed at 100% of our tax capacity, our tax levy would be $4.8 million and some change.”
Shoobridge says, most municipalities do not tax at that rate. “For 2024, The City of Crookston’s tax rate was just over 68.66% of tax capacity,” says Shoobridge. “Last year, our tax capacity was $5.1 million; it went down a little because some of our older homes lost value.” Generally, you want an increasing tax capacity every year, as that means your city is growing.
So, who figures out how much money is needed by the city for the year to operate? “It’s the job of the city council to determine how much money we need to operate the city,” says Shoobridge. “And Unfortunately, many years, many cities, it’s not a Crookston thing, elected officials want to ensure they are keeping their taxes very low, so they want very low increases in the tax levy.” What ends up happening is that a tax rate may go down if the tax capacity goes up. “ If my tax capacity goes from $5.1 to $5.6 million, a 10% increase, but I only increase the tax levy, the dollar amount, say by $250,000, that’s a 5% levy increase on a 10% tax capacity increase,” says Shoobridge. “So, my rate is going to come down a little bit.”
Why is the tax capacity for Crookston so low? “As our housing here in Crookston is aging and reducing in value overall, and our population is declining, tax capacity has also declined,” says Shoobridge. “Our operating expenses due to inflation, however, have increased. So we have a declining income stream but an increase in expense.” Shoobridge says that the City hasn’t saved enough over the years to weather the storm, so to speak.
How will we get the tax capacity back up where it should or could be? “What we are trying to do is encourage growth in our housing,” says Shoobridge. “We are trying to develop new housing; it’s not a quick fix; it takes several years to put a housing development in place, and as that goes through, in the future, our tax capacity will rise based on the new homes.”
In his recent budget presentation to the council, Shoobridge used a lot of comparisons of Crookston with East Grand Forks. “I use EGF for one because they are really close to us and people recognize them as a city, and most of our residents have been there,” says Shoobridge. “What people realize is how similar our two cities really are from an amenity standpoint.’
Shoobridge says he pointed out a few things to the council in the last meeting. “We have a Crookston Sports Complex where we have the capability for three sheets of ice for hockey; EGF also has three sheets of ice,” says Shoobridge. “We have a competition swimming pool; they have a recreational swimming pool, so many of our amenities are very similar.” Like he had explained in his presentation some areas we have more amenities than EGF. We have 22 parks, and all 22 have playground equipment, whereas in EGF, they have 15 parks, and only 12 have playground equipment. All the parks require maintenance, mowing, and cleanup.
Shoobridge mentioned the flood of 1997; while Crookston did an amazing job protecting the city and its homes, EGF was not as successful. He says that happens to be a totally unintended and unfortunate reason for new housing in EGF that, in turn, gives them a higher tax capacity. “As I mentioned earlier, our tax capacity is $4.8 million, and we have a population of 7400,” says Shoobridge. “EGF has a population of 9200 and their tax capacity is $9.9 million, over double our tax capacity.”
We also asked Shoobridge about the proposed cuts that were part of his budget presentation, including the possibility of going from three to two sheets of ice and closing the pool. “I don’t want to say that they are proposed cuts; they are areas of opportunity,” says Shoobridge. “They are things for the council to look at, and the reality of it is, we cannot be all things to all people; we just simply can’t,” Shoobridge says the number that they have in their budget, the costs of operating, the city just simply can’t afford everything that they would like to provide. He says he definitely understands people’s passion for things. “From a tropical climate originally, and I’ve spent most of my life swimming, so I understand,” says Shoobridge. “We have a group of very passionate individuals that are very supportive of our pool, the sports complex is needing exterior refurbishment, it’s 15-18 years old, so, obviously people are very concerned with the potential loss of an amenity.”
City Administrator Shoobridge says they will again discuss the budget at a Budget Workshop after Monday night’s regular City Council Meeting. He says they will try to identify places where they can realistically save money and give the citizens the best bang for their buck with the funding we do have available.
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