Moorhead City Council approves preliminary plan to raise property tax by almost 3%

Property tax rates overall are anticipated to increase 2.96% in 2023.

People sitting in crowded room with counsel members.
The Moorhead City Council meets in February 2022.
C.S. Hagen / The Forum
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MOORHEAD — City Council members voted unanimously Monday, Sept. 26, to approve a preliminary budget for 2023 that would raise property tax in Moorhead by nearly 3%.

The city's preliminary tax levy for 2023 totals $18.9 million, a $1.9-million increase over the 2022 levy. To help fund that increase, the property tax rate is projected to rise by 2.96%.

Commercial, industrial and utility properties in Moorhead have property tax rates that are capped at 1.6%, according to Jenica Flanagan, Moorhead's city finance director. Unless there is a change in market value, those properties will not be impacted by the increased rate. Instead, the state picks up the difference and reimburses the city.

Residential properties, however, would see the increase of 2.96%. A median home, valued at $211,500, would see an annual tax increase of $26.98.

There has been upward momentum in the last year for the market value of residential buildings, apartments and commercial and industrial locations, Flanagan said.


Between 2021 and 2022, the city saw a $52.7-million increase in the value added by new improvements and construction in addition to a $231 million increase in market value adjustments, she said.

Overall, the city’s total taxable market value for 2022 is $3.6 billion, Flanagan said, noting that marks an 8.4% increase over 2021.

“This was a very excellent year of growth for the city of Moorhead,” she said.

Once all the revenue was estimated, the city had to balance the remaining budget amount with property taxes. Property taxes are affected by growth of businesses and residential properties, assessed improvement values, new or ending rebates and extensions and the amount required for the budget.

The proposed general fund revenues for 2023 totaled $36.5 million, with 37% coming from taxes, 25% coming from transfers from utilities, 20% from local government aid and 18% from other sources.

pie chart
2023 General Fund Expenditures.<br/>
Submitted photo / City of Moorhead

The $18.9 million city levy would fund the general fund, park fund, library, debt service and Make Moorhead Home initiative, according to Flanagan.

The Operational Budget requested a funding increase of $1.9 million, and $1.4 million of that will be used for wage and benefit increases to full-time city employees, Flanagan said. That will cover cost-of-living increases as well as the annual employee step increases.

The city also plans to add an engineering technician position and increase the appraiser position from part-time to full-time. The rest will go toward ongoing operational needs.


For every tax dollar citizens pay, Flanagan said, 38 cents go to the county, 34 cents to the city, 26 cents to the school, 1 cent to the watershed and 1 cent to the Economic Development Authority and Housing Authority.

Public comment will be invited during upcoming City Council meetings in October and November, with the final plan requiring approval by the end of November and the final adoption vote slated for the council's Dec. 12 meeting.

During these proceedings, the City Council can reduce the amount that is ultimately approved, according to City Manager Dan Mahli, but they cannot increase the amount.

Individuals with questions on the preliminary tax levy are encouraged to contact Flanagan at 218-299-5317 or by mail at P.O. Box 779, Moorhead, MN, 56561.

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