County board OKs plan to use $500K for 2013 tax reliefPublished 10:14am Friday, December 14, 2012
The Mower County board narrowly voted to give property owners $500,000 in tax relief in 2013.
The board voted 3-2, with chairman Mike Ankeny breaking a split vote, to approve a plan to use $500,000 of the county’s $13.3 million in reserves in 2013 and $1.5 million over the course of five years to soften the blow of increasing taxes.
To Ankeny, the decision isn’t just about tax relief: It also sends a message to the public.
“We’re trying as hard as we can, and we really want to get that across. We’re really looking at trying to cut where we can,” he said.
Commissioners Tony Bennett and Jerry Reinartz also voted to approve the budget and levy, and Reinartz was a strong supporter of using reserves, even though he admitted there are risks.
“I just can’t justify a levy without the use of reserves,” Reinartz said.
The proposed levy hike ticked up slightly to 9.11 percent, as the board voted to reinstate $7,000 for the crisis nursery and $3,000 for the University of Minnesota Extension for 4-H. But by using reserves, the county brought the 2013 tax increase down to 6.03 percent.
Commissioner Tim Gabrielson warned using reserves could cost the county later.
“I don’t think that was the right decision,” he said.
Gabrielson and Ray Tucker voted against the plan, and Gabrielson said he is afraid using the reserves only kicks the can down the road.
“I’m looking at this in a long-term deal,” Gabrielson said. “I cannot jeopardize the money that we’ve got in reserves for a short [term] fix.”
In Gabrielson’s eyes, the decision to spend the reserves now is too great a risk for the future, when those dollars may be needed even more.
Today’s difficult times don’t look to be turning around anytime soon, Gabrielson said, warning more issues could be coming down the pipe: The state is continuing to discuss levy limits for counties, local crime rates are driving Human Services and law enforcement costs, and there’s uncertainty at the federal level with the fiscal cliff.
“I don’t think anything’s going to get better,” he said.
With the continuing mandates and funding cuts, Gabrielson said, the current system is unsustainable.
“I think we’re going to continue to see less funding, and I don’t see any mandate reductions at all,” he said.
A key concern is Mower County’s high crime rate, as the county ranks third in crime per capita, according to officials.
“That is not good,” Gabrielson said. “Our court system, our sheriff, police are just being stretched beyond the limit. Our social services are stretched beyond limit. Unless state and federal does their share, it’s going to go back on county taxpayers. … We’ve been pushed to the limit already.”
Gabrielson worried the county could be forced to borrow money if reserves are spent down too much.
Though Ankeny voted to use reserves, he said Gabrielson and Tucker had valid reasons to vote no.
“Is it a risk? Yes, it’s a risk to cut the taxes,” Ankeny said. “I don’t like burning up the reserves any faster than we have to, because there’s a reason to have reserves.”
The county uses a portion of reserves each year to pay bills and salaries before tax money comes in, and the reserves are also used to cover budget overages. In recent years, Human Services has routinely gone over by substantial amounts because of high out of home placement costs, but county officials believe they’ve budgeted enough funds to cover those costs in 2013.
Ankeny cautioned the tax relief from reserves will only come on the county portion of taxes, and will probably equate to a small change on an individual tax statement. The decision could strap the board’s hands a bit in future years as they budget.
“The con of the whole thing is down the road, next year or the year after, we may have to try to make up some of that,” Ankeny said. “It’s a risk.”
Reinartz was pleased with the finance committee’s work to bring down the levy hike.
“We started looking at an 18 percent increase, so over the last three months we’ve whittled and done all we can to get that levy down to as reasonable as possible,” he said.
As Coordinator Craig Oscarson recommended, the board will use a total of about $1.5 million in reserves over the course of five years. Oscarson described it as phasing tax burden covered by reserves back onto the tax payers, rather than all at once, which would happen with a one-time use of reserves.
Along with the $1.5 million tax relief, the county will spend a substantial portion of its reserves through projects in 2013 and 2014. On top of the roughly $4.6 million of reserves to fund the Health and Human Services remodel, as much as $2.3 million more could be spent on other projects, like replacing the grandstand, updating sheriff’s office radios to 800 MHz, software updates, and road projects.