Budget scenario revised

A second budget scenario requested by Crow Wing County commissioners means revamping budgets and potentially laying off employees.

Commissioners voted 3-2 Tuesday to direct staff to come up with a 2008 tax levy increase of 3 percent. Commissioners Rachel Reabe Nystrom and Doug Houge voted against. Previously the board asked for a budget with a 5 percent levy increase.

County Administrator David Hamilton said cutting existing employees will have to be considered to reduce the levy increase, but will be the last resort. By adopting a 3 percent levy increase, the county would have to cut about $660,000 from the budget staff previously put together.

In September, the board voted 4-1 with Commissioner Paul Thiede against to increase the county's 2008 tax levy by as much as 5 percent, or $1,658,494 compared to 2007 for a total levy of $34,828,376.

By the numbers

Crow Wing County commissioners voted 4-1 to increase elected officials wages for 2008, the list includes the official, position, 2008 wage compared to the 2007 wage.

Don Ryan, county attorney, $104,642 - $96,932.

Todd Dahl, sheriff, $87,186 - $80,490.

Deborah Erickson, auditor, $85,205 - $79,125.

Kathy Ludenia, recorder, $68,667 - $62,175.

Laureen Borden, treasurer, $64,780 - $61,647.

Tuesday, Thiede advocated the move to 3 percent levy increase, with staff coming back with a budget that could be adopted on Dec. 11. Thiede previously suggested a zero-based budget concept. When it looked as though Thiede's motion may die for lack of a second, Board Chairman Dewey Tautges passed the gavel to Nystrom so he could second the motion.

Auditor Deborah Erickson said the 5 percent levy increase previously presented is a workable, lean budget that allows the county to pursue two major fiscal initiatives - $500,000 for the road and bridge fund and $250,000 for a pay equity study - and get on track to build county fund balances.

"I feel we are at the point where we can continue to provide services with little disruption," Erickson said. "We are presenting you with a balanced budget and that's very important. We are presenting a balanced budget on all of our funds which we haven't been able to do for the last few years."

Departments previously removed vacant positions or didn't fill positions for 2008, Erickson said. "The $660,000 cuts would have to include some personnel reductions, because I don't think there is any other way we can get another $660,000 without reducing personnel."

Reduction in staff is likely to mean reduction in services, Erickson said. And the county is faced with funding about $35 million in retiree health insurance liability into the future. At a 5 percent levy, Erickson said the county is being fiscally responsible and still looking toward the future.

Hamilton said there are three key areas to look at for a revised proposal for the 3 percent levy increase such as adding revenue via the jail, looking at positions that are not filled and looking at large areas where there is room to reduce figures.

"You need to know exactly what your final vote will do to the organization, the way you serve the public and the impact on taxpayers," Hamilton said.

Thiede said even with a reduction of about $660,000, a 3 percent levy is still an increase. With increases in home mortgage foreclosures and residents voting down two area school levy referendums, Thiede said this is a historic opportunity to tighten the county's belt and provide leadership.

Tautges said the county can't maintain the increases of the past that out pace inflation saying people are being taxed out of their homes.

"Why should government grow three times as fast as our home budgets," Tautges said. "We just can't maintain that."

Commissioner Rosemary Franzen said the referendum vote has people clearly stating they cannot afford any more. But Franzen said she didn't want to dismantle government in order to do something good this year.

"I think 3 percent is just a bit drastic at this point," Houge said, adding there are great fiscal initiatives going on where the county hasn't yet seen the benefit. "By cutting from the 5 (percent) to 3 (percent) I think it's going to jeopardize some of those initiatives, possibly set them back or postpone some of those. ... By cutting that drastic we are setting ourselves up for problem budgets down the road."

Houge said a 3 percent increase isn't going to eliminate the mortgage foreclosures problems.

"We need to look after long-term issues," Houge said.

"I think our options at this point are go lean or go leaner," Nystrom said. "My biggest concern is that whatever we do here today is sustainable."

Nystrom said she was discouraged by governments, including Crow Wing County historically, that talk about saving money and do drastic things that cost more than was saved because of lawsuits and legal action.

"I think these wild sort of gyrations help nobody," Nystrom said, adding the county would be contracting services at a time when the population is expanding. The 5 percent increase is not a Cadillac levy, she said.

Whether at an increase of 3 percent or 5 percent, the tax levy for 2008 is a tax-rate decrease from 2007, which in turn was a tax-rate decrease from 2006. Forty-three percent of the county's budget is driven by wages and benefits.

RENEE RICHARDSON may be reached at renee.richardson@brainerddispatch.com or 855-5852.