The New Hope City Council approved the 2025 New Hope preliminary budget and maximum tax levy at its meeting on Sept. 9, with both certified to the Hennepin County auditor.
The proposed 2025 general fund budget is $19,580,813, a 5.4% increase over 2024. Significant changes in the 2025 budget include:
- $911,181 increase to fund a 3% increase in wages/benefits, implementation of the results from the City’s recently completed compensation study, step increases, an adjustment to health insurance contributions and a 3% council salary increase.
- $195,880 increase in the West Metro Fire-Rescue District joint powers agreement, which includes an aerial lease and two truck leases.
- $53,795 decrease in IT charges.
- $231,051 increase in central garage charges.
- $64,768 decrease in elections budget due to 2025 being a non-election year.
New Hope is scheduled to receive $1,311,814 in local government aid (LGA) in 2025, an increase of $5,654 from 2024. The City will utilize the LGA revenue in the general fund to offset central garage equipment and building replacement charges; LGA is not used to fund general operations.
The total preliminary tax levy for the 2025 budget is $21,429,909, reflecting a 6.75% increase from last year. It includes a 5% increase to the three levies established last year at $100,000 each to build reserves for future capital outlay needs for the fire station, aquatic park and the city hall/police facility as outlined in the long-term financial plan. The tax levy also includes a 5% increase in the street and park infrastructure levies to support the long-term funding plans for street and park improvements. Additionally, there is an HRA tax levy of $441,163 and an Economic Development Authority (EDA) levy of $218,683. These funds will help finance redevelopment activities within the City, including the Scattered Site Housing Program. The EDA approved the levy at its Sept. 9 meeting.
The total revenue budget (property tax levy plus non-tax revenue) for New Hope’s budgeted funds is $46,491,822, which is a decrease of 0.452% from 2024. The total expense budget for New Hope’s budgeted funds is $50,924,116, representing a decrease of 2.76% from 2024.
Based on the most recent data, the city tax rate is projected to increase from 58.341% in 2024 to 63.910% in 2025. Despite New Hope's property tax rate appearing higher than neighboring communities, nearly 8% of the rate is designated for the street infrastructure levy. This levy funds street infrastructure projects and spreads the cost of improvements across all tax-paying properties in the community, rather than only assessing adjacent properties. Further information on the expected impact will be provided once the final tax capacities are approved by Hennepin County.
Per the Hennepin County Assessor, the median home value in 2024 is $327,500, marking a 0.44% increase from 2023. Recent updates from the County suggest that the projected impact, based on the proposed 6.75% rate for homes valued between $175,000 and $500,000, is estimated to range from $30 to $283 per household.
The City Council will continue refining the budget and tax levy over the next few months. The final budget and levy numbers may decrease but cannot increase. The 2025 budget is posted on the City’s website at newhopemn.gov/finance.
The proposed 2025 budget and tax levy will be presented at a public hearing at New Hope City Hall on Monday, Nov. 25, at 6:30 p.m. Interested residents are invited to attend the public hearing and ask questions. The New Hope City Council will consider the final 2025 budget and tax levy for approval by mid-December.