New construction coupled with a small rise in home values in Edgerton has boosted the city’s tax levy while leading to a slight drop in its tax rate.

Edgerton finalized its budget during last week’s city council meeting, approving a tax rate of $7.37 per $1,000 of assessed valuation, a 1.2 percent drop from this year’s rate.

A lower tax rate is always welcome, but the city faces financial obstacles like any other municipality, City Administrator Ramona Flanigan said.

The new construction, which happened in 2016 and includes some single-family homes and tobacco warehouse apartments, led to a 1.6 percent valuation increase. That equates to roughly $30,000 in additional levy capacity, she said.

But considering health insurance costs for municipal staff jumped by $27,000, the extra levy money is negligible.

Edgerton will not fully fund the insurance increases. Instead, city employees will pay a larger portion of their health insurance so additional levy dollars can be doled out elsewhere, Flanigan said.

Hiring more people, whether that’s a new police officer or a part-time lifeguard, is difficult because the city lacks the money to fill vacancies or compete with the private sector.

“Any new staff positions are extremely difficult to afford unless you cut services in some other way,” Flanigan said.

Like other communities, Edgerton must run a tight financial ship due to state-imposed levy limits. A valuation increase from new construction is the only way a municipality can increase its tax levy, according to state law.

Levy limits do not account for inflation. For places without much construction growth, balancing the budget is an annual challenge, Flanigan said.

She suggested the state consider giving municipalities more flexibility to account for local needs.

Edgerton will borrow money for two street repair projects in 2018. One will reconstruct Chaucer Street, and the other will resurface Broadway Street, Flanigan said.

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