Crow Wing County department heads say a county board proposal for no increase in expenditures for 2008 will mean cutting jobs and services.
On Tuesday, the board paged through 200 sheets of budget information detailing a couple of plans to decrease the county's tax rate. The question for commissioners may be just how much of a decrease to make and what potential cuts will mean.
Commissioner Paul Thiede proposed following a zero-based budget, meaning no increases in expenditures from 2007. Options included not filling vacant jobs and cutting full-time positions, particularly in the sheriff's department. Tuesday, Thiede said the board gave clear direction for no increases but was seeing a budget recommendation from the auditor's office for a 5.4 percent increase.
County Auditor Deborah Erickson said her office did present information on a zero-based budget but also looked at what the county needed for fiscal health in recommending the 5.4 percent increase, or $1,045,804.
The Crow Wing County Board expects to meet with department heads to discuss individual budgets on the afternoon of Aug. 28, all day Sept. 4 and the morning of Sept. 5 at the courthouse.
The board will certify the proposed tax levy on Sept. 11. The levy may be reduced but cannot be increased after that certification.
A truth-in-taxation public hearing on the proposed budget and levy is Dec. 6.
The board will certify the final budget and levy on Dec. 11.
Using a $100,000 Brainerd home as an example, Erickson said 2007 taxes were $1,346.53. If there is no change in taxable market value, the home's tax levy would be $1,280.51 for 2008 at the zero-based budget. The 5.4 percent increase would mean taxes of $1,304.53.
Mike Carlson, deputy auditor, said the reality of a zero-based budget is that it excludes such items as replacement parts. He said the auditor's funding recommendation was based on financial stability.
Susan Beck, human services director, said grant money would be lost as it tied in through her department with expenditures but would not increase the tax levy.
Commissioner Rachel Reabe Nystrom said the potential loss of grant dollars was one reason she voted against the zero-based budget guideline. She said that plan is too rigid.
Thiede said entering into grants with limited durations can cost the county in the long term. Thiede suggested reducing the board's per diem rate from $50 to $45 per day.
David Hamilton, county administrator, was in the middle. After the meeting, Hamilton said he wanted to see something between no spending increase and the auditor's recommendation and needed more time to review details to determine how that could be accomplished.
Hamilton said a 5.4 percent increase sustains what is in place now, and with the soft real estate market, creates a challenge.
Faced with a building slowdown, the county estimates 2008 revenues generated from construction will be reduced by 10.3 percent from 2007. The county's total estimated market value, part of the property tax calculations, is expected to grow, but more slowly than in recent years.
However, the 2008 county tax base is expected to grow nearly 15 percent, or about $14.8 million, with inflation and construction compared to the previous year.
In 2007, the county's tax levy was $33,169,882. Based on a zero-based levy, or one without an increase in spending, the 2008 levy is expected to be $33,393,736, or an increase of .68 percent. The auditor's office recommended a levy of $34,965,686 or a 5.41 percent increase.
Following a plan for no increases in expenditures, county departments determined the county would need to cut about $841,067 in personnel costs.
Doing so included cutting five full-time corrections officers from the jail and five part-time courtroom security officers. Other increases, such as 6.8 percent for library funding, are founded in state law.
The auditor's office suggested that the 5.4 percent increase would keep services at current levels, would mean $500,000 for the highway department's road and bridge fund - which has been underfunded and has a budget deficit of $500,000 for 2007 - would cover expected increases in personnel costs such as health care and increases in utility costs and allow for the hiring of an additional assistant county attorney as another judge is expected to be chambered here as of Jan. 1.
In written remarks to the board, Sheriff Todd Dahl said he recognizes the duty to spend the county's money wisely but was opposed to further reductions in his budget, saying that would reduce service and affect safety.
Dahl said the zero-based budget means he would have to cut $370,069 from his operating budget. Fewer of his deputies will be on patrol as they cover positions lost to cuts in the jail and courtroom security, Dahl said.
The board expects to look at detailed lists of what departments would have to do without in upcoming budget talks before making a final decision.
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