No levy increase will be recommended to the Koochiching County Board when it meets next week to adopt a proposed levy for 2012.
That comes despite a cut in county program aid by the state, interest revenue dropping and a decrease in the amount of money gained by managing state tax forfeited lands, according to county Administrative Director Teresa Jaksa.
The proposed levy must be adopted prior to Sept. 15.
Jaksa met with the board in committee Tuesday to provide information about the ongoing budget development. As of Tuesday, the 2012 budget was at $22.1 million.
The budget includes a 2-percent cost of living wage increase for employees in 2012.
Jaksa said on Friday, the county budget showed a $1.4 million deficit. “And that was not shocking to me,” she said.
However, she said Tuesday brought ideas for cuts. “By the time I went through, I made cuts where I think I can and there is not whole lot left to cut,” she said.
The expenditure side of the budget leaves little to cut, she said, adding that she is attempting to hold the budget at the 2011 level.
“If this scenario came through, this is a budget that is balanced,” she told the board. “But it doesn’t come without cuts.”
She said she would not recommend a levy increase over 2011, which collected $3.9 million in 2011 from property owners, because the state ended the market value homestead credit, which spreads the aid loss to taxpayers by reducing tax capacity with a home devaluation process and increased the tax rate of levy authorities.
In addition to other decreases is revenue from services, such as the sale of passports and through Huber jail surveillance. Jaksa said that many people are electing to stay in jail because they cannot afford the expenses that are associated with electronic home monitoring.
Jaksa noted that at one time, the county received $500,000 to $700,000 annually in interest from its reserves. In 2012, the interest gained is estimated at $175,000.
The 2012 budget will also spend down unreserved funds by about $300,000, about $112,000 less than was used this year, she said. About six months of county operation, $3 million, will be set aside in the reserves leaving about $212,500.
“There probably won’t be a time we don’t use the unreserved funds for the budget, but it’s important we get these numbers down as low as we can,” she said.
The most difficult budget to determine, she said, will be the health and human services budget, she told the board.
“But Terry (Murray, Community Services Department director) has a plan,” said Board Chairman Wade Pavleck.
“But it’s not an easy plan,” Jaksa said. “The reality of the budget is (the state) cut our funding or cost shifted.”
Despite what could be called a bare bones budget, Jaksa said Koochiching is in a good position in comparison with other counties because of its conservative budgeting practices.
Commissioner Rob Ecklund noted that many counties are increasing their levies by 2 percent over 2011, which also brought a levy increase to some.
“They have to,” said Jaksa. “The state provides revenue to do mandated services, and then cut them back and you still have to provide the services.”
