Koochiching County commissioners Tuesday set the proposed 2013 tax levy at 1.5 percent more than was collected from property owners in 2012.

The proposed levy may be reduced, but not increased, when it is finalized in December. Other area governments are also in the process of proposing levies. The International Falls City Council will meet in special session today to set its proposed levy.

The increase would collect about $58,500 to help resolve a $500,000 deficit now on the books as the board develops the 2013 budget.

County Commissioner Wade Pavleck, who was absent from Tuesday’s meeting, relayed through Administrative Director Teresa Jaksa that he could live with the proposed increase and would work to reduce it.

While Jaksa said the levy increase would play a small role in reducing the deficit, the budget would be balanced by using fund reserves and making cuts where they have not already been made.

Jaksa said spending, as much as possible with state and federal mandates, has been kept to the 2012 level.

Part of the deficit is a result of a change in a state funding formula that reduced by $181,000 state program aid anticipated in 2013 by the county. In addition, a Minnesota Department of Corrections proposed rule change requiring two staff around the clock at the county jail would increase spending by at least $90,000 per year. Those two items, she said, add up to a $271,000 increase in spending — more than half of the projected budget deficit.

Jaksa said she hoped the DOC would allow for a waiver, even for one year, of the jail staffing requirement if it is approved.

“We will try to keep what we have,” she said of cuts to programs and services. “A lot are mandated, and some are discretionary, but important.”

And, she said, it’s unknown whether the actions of the 2013 Minnesota Legislature would impact county funding or spending.

Meanwhile, Jaksa said calculating the 2013 county tax rate with an increased tax capacity caused by more construction in the county and added assessment valuation would decrease from 2012 with a 1.5 percent levy increase.

That means that if no other changes have been made to a property, and all other taxing entities taxed the property the same as this year, many property owners would see no change in property tax in 2013.

In other business, the board heard that flags at county facilities would be flown at half mast in respect for county Deputy Riley Burnell, who with his wife Natasha, was killed in a car crash last week.

The board canceled a Sept. 18 board meeting because meetings of county interest elsewhere in the state may result in a lack of a quorum for the meeting.

In Koochiching Development Authority business, the board heard that staff from Coronal, a partner with the county in the Renewable Energy Clean Air Project, which would gasify garbage and other waste to create energy, will be in the community Sept. 27.

Commissioner Mike Hanson also reported that another contract to clear 50 acres involved in a horticultural peat project near Big Falls has been awarded by Berger Peat Products of Quebec.

Hanson also noted that four Canadian peat companies have expressed interest in 12,000 acres nearby for sphagnum moss harvest.

The peat to be harvested by Berger would be mixed with fertilizer and used in “high-rent” green houses in places like Texas, Mexico and Florida to produce specialty foods, reported Hanson.