Budget decisions will be the prime topic Tuesday when Crow Wing County Board commissioners look at the county’s preliminary budget and levy.
In an earlier meeting this week, commissioners questioned how the blow of a Legislative tax shift could be softened for area businesses.
Tim Houle, county administrator, said the only thing the board can do is reduce spending, but he said savings cannot be directed to specific areas for relief. The tax shift will occur, Houle said, unless the taxing entities — county, cities and school districts — all reduce budgets in significant ways.
The county board must decide how to handle the budget. Should money be socked away in capital improvements for a proposed new Law Enforcement Center in 2016 so it can pay for the construction?
Or should the county cut that from the budget now and look at bonding for the money and incurring debt down the road?
The county’s debt service, for its previous construction projects, will end in 2024. Board Chairman Paul Thiede said perhaps the construction plan for the LEC (to put $8 million toward it) could be extended to 2018 as a tool to lessen economic impacts now.
“You’ve got a lot of moving parts here folks,” Houle said. “We can give you a lot of information, but at the end, it’s your decision.”
Houle said staff came back with a reduced levy proposal after hearing from the board that at least a zero percent increase in the levy was desired. That move was proposed to lessen the impact of the homestead market value credit elimination. The board will have to decide if it wants to make further cuts and which programs may be affected. Commissioners said they feared area businesses will close and jobs will be lost with the coming tax shift.
The Legislature’s elimination of the market value homestead credit, designed to reduce property taxes for low- and mid-valued homes, means $3.8 million in state funding is going away. In it’s place is a homestead market value exclusion, which is designed to provide tax relief, though not as much.
For example, a $76,000 home would be taxed as if it’s worth $45,600 with $30,400 as the amount of the exclusion. The county reported taxes will be shifted to commercial and seasonal properties and 85 percent of the county will be affected by the change.
“There are certainly winners and losers,” said Mike Carlson, finance director, at a county meeting earlier this week.
The county looked at its current budget and the proposed 2012 budget. Notable reductions in spending included 40.2 percent less spent for supplies and materials for a spending reduction of $2,009,592 and a 5.6 percent reduction in public aid assistance for a $507,082 reduction in a budget item of $8,618,578. Thiede said the decrease in public assistance comes at a time of greater demand for services because of the economy, but the county has less money coming in as the rules are changing and people may not qualify as they have in the past.
Crow Wing County compared its 2011 budget and proposed budget expenditures for 2012.
• Personnel services: $31,622,239 up to $31,730,360.
• Services & charges (highway): $12,035,366 up to $12,836,176.
• Supplies & materials (including $1.9 million for 800 megahertz radio system.): $4,995,746 down to $2,986,154.
• Capital outlay: $3,552,663 down to $3,490,341.
• Debt services: $5,826,375 down to $5,774,863.
• Other expenditures: $1,734,870 up to $1,831,642.
• Total expenditures: $68,892,919 down to $67,268,114.
As for employees, the county reduced full-time staff equivalents from 485.6 in 2008 to 414.8 in 2011. The proposed 2012 budget goes up in employees to 418.3.
The additions proposed in the sheriff’s department come from a returning military service and an increase to courtroom security of 1.5 FTE. The county attorney requested one additional assistant county attorney and one additional legal assistant.
For facilities management, the county is considering reducing two maintenance technician II positions and adding a maintenance technician I and a building maintenance supervisor. The county is considering not hiring to fill the late John Maattala’s post as a solid waste technician. And community services is proposing a .5 FTE reduction.
Carlson said another consideration comes from senior management who voluntarily did not increase salaries or took furloughs but may face a time when they make less than middle managers in their department.
“It’s a tough discussion to have,” Carlson said.
Appropriations are another area the county may examine. Budget items go to a variety of county endeavors for large and small contributions, from $720 requested for the Nisswa Chamber of Commerce to a request for $565,697 for the Kitchigami Regional Library.
Commissioners noted the state has allowed it to reduce its library appropriation by 10 percent on a temporary basis. Thiede said money set aside for library expansion could be used to pay operating expenses. Houle said paying operating expenses out of the savings account while providing temporary relief is not a good idea as it aggravates funding down the road.
A funding request of $162,000 for the Brainerd Lakes Regional Airport, which the county jointly owns with the city of Brainerd, represented a 3.2 percent increase from 2011. Houle said he planned to talk to the airport manager again before Tuesday’s meeting regarding the increase. The airport has not asked for an increase during the past three years, but noted its expenses have increased during that time.
The county board plans to discuss the 2012 preliminary budget and levy at its Tuesday meeting. The board has until Sept. 15 to set a preliminary budget. Once set, the preliminary budget may go down but cannot be increased.
RENEE RICHARDSON may be reached at firstname.lastname@example.org or 855-5852.