The International Falls City Council Monday adopted a 2012 levy of $2.1 million to support a $12.2 million budget.

The levy represents a 3-percent increase over the amount collected from property owners in 2011 and will provide an additional $61,000 to the budget.

The council adopted the levy and budget following a public hearing that drew two people, who had no comment.

Councilor Cynthia Jaksa, chairwoman of the city’s Finance and Legislation Committee, provided a 20-minute presentation about how state cuts to the city’s local government aid and the elimination of the state’s homestead market value credit influenced the city’s budget.

Jaksa said she was a bit disappointed with the lack of participation in the hearing. “I had hoped there would be more outrage,” she said.

Meanwhile, Jaksa said the state was responsible for local property tax increases because it:

• Cut $638 million in property tax aids for 2012-13.

• Cut $356 million from the market value homestead credit program, with its elimination.

• Cut more than $200 million from local government aid.

Jaksa said the elimination of the homestead credit program, and its replacement with a value exemption program, resulted in a $433,000 loss in tax capacity for the city, which she said represented a 14-percent loss in tax capacity base.

The change in programs intended to provide property owners with tax relief hit rural areas in the state harder than metro areas because rural areas have fewer high value homes.

In addition, she said the battle to retain local government aid will be crucial to the people of International Falls. While the levy will collect $2.1 million from property owners, she said the city will receive $3.7 in LGA.

“If we lose LGA, the city will be radically changed or property taxes will double if we try to replace that,” she said.

Had the state not changed the homestead credit program and cut LGA, the city could have cut taxes, she said. From 2008 through 2011, she said the city has not received what it was promised by the state in LGA.

To make up the gap in revenue from the state, she said the city would use $158,000 in reserves to balance the city’s budget. While she said spending down the reserves was justified this year, continuing that trend would not be financially healthy.

Meanwhile, Jaksa encouraged property owners to help stop the erosion of state aids to the city by:

• Contacting state elected officials and asking them to restore LGA to previous funding levels.

• Signing up to speak at lobbying day at the Capitol. “There needs to be a backlash (by state residents to the cuts) or the momentum to cut will continue,” she said. Jaksa urged residents to contact her for information on how to get involved with lobbying day.

• Building momentum for changing the current trend by sharing information about the cuts with fellow property owners.

Other business

In other business, the council approved a request by the International Falls Area Chamber of Commerce to allow fireworks for the Icebox Days festival, planned for Jan. 18-22.

However, Fire Chief Jerry Jensen said he was having difficulty locating the appropriate-sized fireworks for the event. Jensen said the fireworks used for the winter festival are smaller than those used during the Fourth of July celebration. He told the council he would continue to check with various providers for the fireworks.

The council agreed to allow the Irvin N. Anderson Amphitheater to be used for a wedding, within the existence of policies established for private use of other city facilities.

In addition, the council said it would provide information about insurance needs and city use policies to people seeking use of the city’s facilities.

The council referred to committee a proposal by artist Bruce Trask for placement of a Koochiching history mural on a building at Fourth Street and Second Avenue formerly used as a visitor center.

The proposal calls for $10,000 down and $10,000 upon completion for designing, landscaping, cleaning, priming and painting the design by the fall of 2012.

Because the building is not owned by the city, the council said the proposal needed further discussion.

Councilor Tim “Chopper” McBride, who serves as the president of the city’s Economic Development Authority, announced that tickets for a Feb. 25 performance at Backus Auditorium by Twin Cities band Arch Allies go on sale today. The tickets cost $10 now, and $15 at the door, and could be used as stocking stuffer Christmas gifts, he said.

Profits from the 1,000 tickets to be sold for the performance will be split between the EDA and Backus, he added.

Arch Allies opened for last year’s July 2 performance of Loverboy at the city’s Irvin N. Anderson Amphitheater.