At a time when neighboring communities are considering as much as double-digit percent tax levy hikes, the Albert Lea City Council voiced support Thursday for approving a 2012 overall preliminary tax levy increase of 2 percent — a number that many councilors said they hope can be reduced to zero before the end of the year.

Though the City Council will not officially vote on the preliminary budget and levy until its Sept. 12 meeting, the council talked in-depth about the budget during the Thursday workshop and how to make up for tough cuts from the state.

Specifically, the city is looking at a 4 percent decrease — or an about $600,000 decrease — in local government aid in 2012, health insurance cost increases by about 10 percent and step increases for some employees. The market value homestead credit will also be eliminated in 2012, being replaced by the market value exclusion.

From the market value credit change, most nonhomestead properties and commercial properties — along with homestead properties valued at greater than $76,000 — will see automatic levy increases even if the city and other local government entities freeze spending.

Councilors said they could not support a high total tax levy when these changes were already going to be a huge impact on many.

Albert Lea City Manager Chad Adams said he and City Attorney Lee Bjorndal and Human Resources Director Mike Zelenak will be meeting soon to talk about a potential early retirement incentive program, along with any other ways the city might be able to collaborate on projects and services.

The councilors heard budget presentations from each city department head, including what reductions have already been made within their budgets.

Look to Sunday’s Tribune for a more in-depth story about the budget proposals.