9/26/2019 3:56:00 PM Early levy set at just under 6%
With the County Auditor and Chief Deputy Auditor seated at the table-- the County Board bandied about a number of 2020 levy hikes last week before settling on 5.75 percent. The auditors provided quick financial impact scenarios for everything from a 6.2 percent hike to a 3.5 increase.
The bottom line is; if the only adjustment needed would be for personnel, a basic cost of living wage adjustment of three percent requires a two percent increase in levy. There were options discussed whereby the county debt could be paid using outside Program Aid, versus levying local property tax to cover the payments owed. But then the aid isn’t available to provide services.
Unfilled positions could translate to personnel freezes, which have been unproductive in the past. Many county employees actually generate substantial income and when they aren’t there to do the work the revenues aren’t there either.
There was also a suggestion that just delaying one major 2020 road project means the increase could be trimmed by a percent or so.
The first motion made by Commissioner Mike Robinson to adopt a levy increase of 4.7 percent failed 1-4.
Commissioner Chris DuBose said maybe in December when the final 2020 levy and budget gets set in stone, the county could be at that number. DuBose wanted to set the working levy at an increase of 5.5 percent, which also failed.
Robinson said the Board always sets a September preliminary levy with the idea it will be reduced by December adding “I know how it works...we never get there.” Interim County Administrator Chase Burnham told the Board it’s time for a “pivot” this year in budget-setting and he’d advocate for greater precision. “Let’s avoid getting into fund balance,” he advised, meaning the Board historically sets the levy at an insufficient sum, and savings are eventually tapped.
Burnham reminded the Board, “We are a fairly heavily-bonded county,” and steered conversation away from more borrowing.
Burnham reminded the Board department heads were recommending in the five percent-plus area as an increase. Robinson responded with, “The department heads aren’t running this county. We are.”
Chairman Rick Greene stated last year the levy (for this year) went up 7.8 percent, so what’s being proposed is less than the most recent hike. Greene continued, “Remember when we cut, we end up having to add it back,” and the county commissioners have confronted that reality after a few years of zero hikes. Greene said his constituents would rather see a steady, small levy increase.
Greene had supported a 6.2 percent motion made by Commissioner George McMahon, stating this action in September is only a preliminary maximum working levy, but that also failed 2-3.
Next, there was a 6.1 percent levy increase proposed, and Commissioner DuBose suggested a “friendly amendment” making the increase 5.7 percent.
This passed with Robinson opposed. The preliminary local levy is $39, 596, 553.
Taxpayers will see their 2020 property tax estimated statements mailed this fall based on these preliminary levy and budget scenarios of all their governing units (city, schools, etc) The county holds its taxation hearing December 4 at 7 p.m. There is a vote on a final levy after this.
According to the meeting information materials the county has seen its levy go from about $32.4 million in local levy in 2015 to what could be the $39 million-plus if the proposed hike is made final. What exactly the impact of a levy hike is on specific individual parcels is difficult to predict.
The countywide average increase in market value is about eight percent. Areas like Lindstrom, Shafer, Harris and Rush City are calculated at 10 percent or more as a hike in valuations. The parcel valuation is a key element in the formula for setting property tax.