ELY — The city’s largest revenue source remains stagnant while costs continue to rise, according to city officials reviewing the preliminary 2026 budget.
Local Government Aid from the state, which comprises roughly 70 percent of Ely’s general fund revenue at $3.15 million, has seen minimal growth for two consecutive years. City Clerk-Treasurer Harold Langowski said the aid increased just 0.12 percent last year and shows no increase in the proposed 2026 budget.
“Our level of funding is staying the same when we have inflationary impact to labor, materials, construction … they all cost more,” Langowski said during a recent interview.
The preliminary budget, still in its early stages, projects $4.49 million in total revenue. Only about 18 percent of that, or $808,200 would come from the local property tax levy. That would be an increase of $123,600 compared to this year’s levy, which would necessitate a 6.07 percent tax hike next year.
The city council must set a maximum levy amount in September. The city can then continue revising the budget to potentially lower the levy amount, but it cannot increase it after that point.
Langowski said the council typically takes a conservative approach to increasing the levy and that department heads are being asked to propose cuts wherever possible.
“The population of Ely is older with a lot of lower/moderate income folks living in town. We can’t make up the difference from losing LGA increases just by increasing the levy,” he said.
Despite the challenges, Langowski said there’s no immediate crisis.
Ely has developed a five-year capital improvement plan that includes street projects like Harvey Street improvements and a major water supply project. The city is seeking state bonding funds and federal money, though Langowski expressed uncertainty about future federal funding availability.
“Of course, our senators and congressmen are supporting those projects, but we don’t know if federal funding will be available for those projects anymore,” he said.
Looking ahead, Langowski anticipates continued pressure on state funding.
“It’s no secret the state is going to see a budget deficit and probably budget cuts for the next two years,” he said.
The preliminary budget will undergo further review by the city council before final adoption, with potential reductions to the property tax levy depending on available revenues and spending priorities.