County levy could increase 4.5 percent

Published 7:59 am Wednesday, September 15, 2010

The Mower County Board of Commissioners set the county’s preliminary budget levy increase at 4.5 percent Tuesday.

“It’s never a pleasant scenario to have a tax increase, but at this point in time, we feel that it’s necessary,” said Commissioner Ray Tucker.

The 2011 levy would be $15,780,188. The 4.5 percent increase to the property tax levy — which the board approved by a 4-1 vote — is not yet certain, as the board can still reduce the levy but not increase it before setting the final levy in December. By statute, the county had to set the maximum levy increase on Tuesday.

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Even if the 4.5 percent increase is the final change, residents won’t necessarily see a 4.5 percent tax increase.

According to Finance Director Donna Welsh, the average $100,000 home will see an increase of about $30 to $35 a year. However, she cautioned that each individual property is different and some resident may see a decrease while others see a larger increase.

Welsh noted that new commercial construction has increased the county’s tax base, so that will offset a portion of the increase.

Even with the additional revenue, Oscarson said the board will need to cut about $7,000 to $8,000.

‘Sharp and Severe’

The finance committee’s goal is to lower the levy below 4.5 percent, but Oscarson said there’s a need to have some room for flexibility if the public doesn’t want certain things cut.

“There’s going to need to be some input from board members and the public on what would you like us to cut?” Oscarson said.

If the levy did not increase, Oscarson said there would be a budget shortfall of more than $600,000. One option would be to cut employees. According to Oscarson, employee cuts would then affect as many as a dozen employees.

“It’s not going to be painless,” Oscarson said.

Commissioner Dick Lang, who voted against the preliminary 4.5 percent increase, said he prefers making cuts to any tax increase, and he thinks the public agrees.

“I will not be for any tax increase,” Lang said. “The public is crying out.”

“I’ll make any cut that’s necessary in wages — whatever it may take — to stop this raise and raise and raise on taxes,” he added. “It’s got to stop.”

Oscarson described any additional cuts that could be made this year as “sharp and severe.” Commissioner David Hillier noted that cuts could affect organizations like the Mower County Historical Society, the Austin Public Library and the Mower County Soil and Water Conservation District.

“The ones that end up taking the largest hit are the local projects that we like to be involved with,” he said. “We need to consider those local issues when we look at the budget.”

Tucker, too, said any further cuts could be deep.

“The problem is that to reduce the budget from this point forward is not going to be without pain,” Tucker said.

Driving factors

According to Oscarson, the county has recently used miscellaneous revenue — money set aside from reserves and loaned out that is repaid to the county — to balance the budget. Without that money coming in, Oscarson said the levy increase may have been closer to 6 percent. However, Oscarson warned the board that money is set to stop coming in, creating a problem for future budgets.

Due to some high insurance costs in the last year, the county’s health insurance premiums increased by 25 percent. The final increase is expected to be closer to 20 percent after a change to the county’s drug prescription formulary.

The county also agreed to tack on an additional $18,897 in funding for the Sentenced to Serve program. Out of Home placements in Correctional Services have also increased and could increase by an additional $200,000 this year.

The county’s interest income has also been greatly decreased

The county did not budget any money for an employee salary increase, and

Oscarson noted that salary discussions with the unions could sway the budgets.

“It’s a pretty sparse budget in terms of employee wages,” Oscarson said.

Discussions over a union contract will start later this fall or early next year. The county board will continue to discuss the budget as the board attempts to lower the 4.5 percent levy increase.

“We’ll continue to scrutinize the budget as we move forward to the end of the year,” Tucker said.