Ripples

Star Tribune Sun, 04 May 2008 02:30:05 GMT
Slow homebuilding has Scott County scrambling

South metro cities are planning budget cuts and eyeing tax rates as growth slows and property values fall. The free fall in new construction of homes in once-soaring Scott County is forcing some unpleasant choices on city officials: • Shakopee is undertaking a top-to-bottom rethink of everything it does at City Hall in the face of what could be a $1.5 million gap between what's coming in and what's going out. • Prior Lake has ordered nearly $500,000 in cuts in this year's budget, ranging from lifeguards to staff in building and inspections. • Savage, the county's other major city, while it isn't facing anything quite so dire, is throttling back on staffing as attrition occurs. On the county level, meanwhile, commissioners will hold an informal workshop on Tuesday to discuss its own budgeting challenges. Shakopee Mayor John Schmitt said that city faces a much chillier budget climate than it's been accustomed to, as growth slows and the value of property levels out. ... Housing starts continue to plummet even from the depressed levels of the past couple of years. The Builders Association of the Twin Cities reported last week that only 811 new housing units have been permitted so far this year in the metro area. That's less than half of the 1,988 in the same period last year -- and only about a quarter of the 3,070 in 2006. Contrary to what was often true in the past, no Scott County cities were listed as leaders among those cities that are seeing residential growth. "A month ago I said, 'Guys, we need to do some work today to prepare for what we face in the 2009 budget,'" Schmitt said. "Otherwise we're looking at a big tax increase and that just can't fly."

[[keywords: PropertyTax;Metro;]]