Harvard proposes tax levy increase to capture new growth

Harvard residents will have an opportunity to voice their opinions about a proposed property tax levy with an estimated 38 percent increase over 2017 during a public hearing Tuesday.

The total property taxes extended to the city last year was about $2.5 million. This year, the city is looking to levy about
$3.48 million.

City Administrator David Nelson said the increase is part of a balloon levy strategy that municipalities use to capture new revenue created from increases in property value.

Although the levy will represent a
38.3 percent increase over last year, Harvard Mayor Michael Kelly said in a social media post that this will not result in a
38.3 increase in property taxes.

Because it is not a home rule municipality, Harvard is limited under the Property Tax Extension Limitation Law to a tax extension increase of no more than 5 percent over the previous year or the rate of inflation, whichever is less.

However, this limitation does not include increases approved by referendum, such as the tax approved in March to provide for the Harvard Diggins Library and the city’s parks that will take effect this year.

Nelson said residents likely will see a
2 percent to 2.5 percent increase in the city’s portion of their property tax bills.

Last year, Harvard approved a tax levy with a 46 percent increase over the previous year, but the actual increase to the city’s portion of the property tax was about
2.5 percent, Kelly said in the post. Under this rate, a resident who paid $661.93 to the city in 2016 paid $684.89 in 2017.

The hearing will be at 7 p.m. in the City Council chambers, 201 W. Front St.

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