St. Cloud City Council Approves Budget with Tax Hike

(KNSI) — The St. Cloud City Council committed to a new financial course on Monday night, accepting a budget proposal made earlier this year by Mayor Jake Anderson.

Baseline operational costs will jump as much as 4.5% with a voter-approved referendum for a new fire station on the southside of town also coming due. The budget represents a shift from predecessor Dave Kleis’ “capture the growth” strategy to sustainable, consistent investments.

Anderson presented to the council, telling members that 58% of the city’s vehicle fleet is overdue for replacement. In extreme cases, the delay has been over 20 years. Older vehicles are accumulating maintenance needs that have also been put off to the breaking point. Pay has stagnated and St. Cloud was having trouble retaining employees, particularly in public safety.

Council President Mike Conway likens the budget to wind underneath the wings of an airplane. He says Anderson’s tax hike helps pull St. Cloud out of financial freefall. “This is going to turn us from going deeper and deeper into reserves. If we’re a plane, we’re flattening out, and we’re going to go up a little bit and backfill those reserves.”

Conway left open the possibility that Mayor Anderson and his team would need to ask for another tax hike in the future to keep the airplane climbing back to a safe cruising altitude.

St. Cloud will need to ensure its reserve funds stay at 40% to keep its investment grade bond rating. In recent years, those reserves were being raided to fund routine operational expenses. Temporary grant assistance and pandemic-related funds were other stopgaps used to keep the city tax rate flat for decades.

Much of the discussion surrounding budget approval involved the demand on taxpayers from other local government agencies. The St. Cloud Area School District will soon begin building a new fieldhouse and making facilities upgrades passed by voters earlier this year. Stearns County is in the process of building a new justice center to the tune of roughly $320 million.

Conway says what others are doing can’t be the primary reason to reject a move that will make city finances stronger. “The only things the city control[s] was the fire and the budget. The other things, while I’d like to say, ‘Hey, let’s all share,’ the schools asking for their things, the county’s going to ask for their things.”

A public hearing was held on the budget with two people speaking against a tax increase. It was not enough to sway the council. The vote was 6-1 in favor, with only councilmember Scott Brodeen against. The final budget will be agreed to in December when the state provides more clarification on how much it will be chipping in through Local Government Aid.

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