Area governments conduct 2012 budget, levy hearings

Just five members of the public attended the state-required hearing this week, and just one letter was received concerning the board’s support of Ranier’s annexation of unincorporated areas last year.

Governments must certify levies and budgets prior to the end of December.

• The Ranier City Council will conduct its levy and budget hearing at 6:30 p.m. Monday during its regular meeting. The council has proposed a levy increase of more than 400 percent in 2012 over what it collected this year.

The council has proposed to increase its levy from $28,000 this year to $140,000 in 2012. Officials say the increase is a result of providing services to Ranier’s population, which quadrupled in number from about 170 to about 650 residents when it annexed areas abutting the former city boundary.

• The International Falls School Board will conduct a budget workshop at 4:30 p.m. Monday, followed by the regular meeting at 6 p.m.

The board’s budget and levy hearing is scheduled to follow an open forum and adoption of the proposed levy of $1.9 million is scheduled for later in the meeting.

• The International Falls City Council will conduct its hearing at 6 p.m. Monday following the 5:30 p.m. start of its regular meeting.

The council has proposed a 3 percent increase in the levy over what it collected this year. The increase will collect about $60,000 more from city taxpayers than this year’s levy and will support a $2.1 million levy.

County

County commissioners based their decision not to raise the levy because of tax increases on many properties that came as a result of the state’s elimination of the homestead market value credit.

The credit was replaced with a homestead market value exclusion, which reduced the tax base of the county.

County Administrative Director Teresa Jaksa explained during the hearing that as a result of the state’s change in the homestead program, the county lost $99 million in market value.

That resulted in a 10 percent increase in the county tax rate.

“Even though the county board did not propose a tax increase for next year, the fact that the state changed the program reduced the value people pay taxes on and decreased the tax rate and increased the taxes,” she said.

Jaksa noted that to fully understand the tax changes, area residents needed to attend the county’s hearing, as well as the hearings in the school districts and cities in which their property is located.

Jaksa discussed how changes made in funding at the state and federal level force counties to provide required services without the funding, shifting costs to the counties and their taxpayers.

As a result, she said Koochiching has made the cuts it can in the budget and filled the gap with reserve funds.

Jaksa said she is concerned that further state and federal budget troubles may jeopardize the county’s financial stability.

“We use the fund reserves to off set the costs without burdening the taxpayers, but we must be cautious about the use of fund reserves,” she said.

Board Chairman Wade Pavleck said that for years Koochiching held the status of the lowest property taxes per capita in the state.

He said the “closed door deal” between Gov. Mark Dayton and the Legislature to end the government shutdown, that included the elimination of the homestead credit, along with borrowing from school and health and human services funding and tobacco settlement funds, could “tip that on its head.”

“This is a huge shift in the burden on county taxpayers,” he said.