Crow Wing County is proposing a 3.99% increase to its property tax levy for 2022, amounting to $1.64 million more than will be collected this year.
The county board Tuesday, Sept. 14, unanimously agreed to set the preliminary levy at $42,908,105, which accounts for approximately 43% of the county’s projected $100,106,855 in revenues for next year. By approving the resolution and setting the figure, commissioners agreed the 3.99% increase is the maximum amount by which the tax levy would rise next year. The increase can be reduced before final certification of the levy in December.
How this levy increase would impact the average county property owner depends on a number of factors, including changes to one’s own property value and the number of additional taxpayers added to the rolls through new construction, which along with market value affects the overall tax rate. A county analysis showed an expected $140,573,617 worth of new construction during 2021, a 26% increase over 2020 and the highest total in a decade. Although next year is expected to see a slight dip to $134.3 million, it would still represent just over 1% of the estimated market value. That figure for all properties in Crow Wing combined is expected to hit $12.94 billion next year, also a decade-high and more than $3 billion more than the market value in 2013.
How property taxes would be spent
While property taxes are expected to account for 43% of total county revenues next year, intergovernmental revenue — such as grants, cost-sharing agreements and other financial arrangements with other units of government — would account for 35%. Other taxes (9%), including the local option sales tax supporting highway projects, and charges for services (7%) make up the bulk of the remaining revenue. The increase in intergovernmental revenue is related to state and federal aid along with local participation in road projects included in the highway improvement plan, according to Nick Mielke, finance director. There are also some increases in state and federal grants in the community services area.
Of the $42.9 million in taxes set to be collected in 2021, the bulk will support community services and public safety. Close to one-third of the taxes will be directed to community services — the county department tasked with adult services, child support, children and family services, community corrections, public health, financial assistance, nutrition support and veteran services. Public safety services — accounting for the sheriff’s office and the county jail — will receive 30% of the collected property taxes.
“There are aspects of both entities that are very reliant on the levy in order to provide the programs they have,” Mielke said. “Community services does have other outside funding sources, but still has a high need for the mandated services we have to provide, as well as the services the board has elected them to do.”
The remaining taxes collected will be split among the other county departments and spending areas — administrative services (13%), governance services (11%), land services (6%), highway services (4%) and capital projects (4%). None of the tax levy will go toward paying off a small amount of remaining debt, which includes airport bonds and a small portion for the Crosslake highway department facility. Instead, that $98,000 budget line will be covered by money already in the county’s possession.
Notable expected changes to budget
Of all county departments, the sheriff’s office and jail would see the biggest increase in the amount of property tax levy supporting its programming with 14% more next year compared to this year. Commissioner Paul Koering asked Mielke to explain what was driving this change.
“I was so pleased with the sheriff’s department, because I thought they were coming up with a zero, and now you’ve got them at 14% increase,” Koering said.
Mielke explained while the portion of the levy dedicated to the sheriff’s office would increase, their actual expenditures were expected to drop by 2% year over year.
“On the revenue side in ‘21, we used $1.8 million in fund balance to deliver their program,” Mielke said, referring to a fund akin to a savings account. “This is us moving back toward a balanced budget, is what it’s doing. It looks significant here, but it’s us bringing it back to a balanced budget.”
County Administrator Tim Houle added another aspect to consider is the loss of revenue for the jail due to the Minnesota Department of Corrections pulling back from housing state prisoners in Crow Wing during the pandemic. This created an approximately $1 million hole in the sheriff’s office budget. The proposed 2022 budget calls for increasing the sheriff’s office fund balance by $228,834 as well.
“We booked half of the loss of the DOC revenue last year, and so you’re looking at the other half of the DOC revenue this year,” Houle said. “I don’t think we’re going to see all of that loss. We should be able to make up some of that loss boarding other county inmates, even if it’s not state inmates. But it’s the revenue side that’s causing that 14% (increase).”
Another notable change between this year and next comes in the capital projects area, expenditures for which are expected to increase by more than double in 2022. Capital projects refer to projects maintaining or improving physical assets of the county, ranging from computers to vehicles to buildings.
While the increase is stark, the $4 million slated for next year is more in line with a typical spending year after two years of much lower than usual capital spending. In 2020, the board agreed to suspend its capital improvement plan in the midst of uncertainty surrounding the financial impact of COVID-19. Pandemic-driven supply chain disruptions further depressed spending in that area headed into this year, Houle noted.
Among the most impactful proposals are two multi-year facilities projects: a remodel of the community services building and a buildout of the judicial center. The community services remodel would include changes to the customer service reception and intake area as well as the offices on the first floor, for a total expected cost of $2.4 million over four years with $142,126 of that coming in 2022. The judicial center project would include building out Courtroom 2, judges’ chambers and Hearing Room 2 — these rooms are already located within the judicial center, but were never finished when the building was first built. This three-year project is expected to cost $1,315,000, with $410,420 in costs in 2022.
During an August budget committee meeting, Mielke reported the 2022 budget would include the addition of 11.5 full time-equivalent employees to the county workforce. Koering, who has previously shared displeasure over growth in personnel, said he was willing to accept the necessity of these changes.
“I don’t like that, but I do know that there’s different departments that have been really taxed hard, and I understand,” Koering said Aug. 26. “I don’t like it, but I understand that we’ve gotta get the job done, so I’m OK with that.”
What else was in the resolution
The board resolution setting the preliminary levy amount also resulted in a number of other actions, including setting the preliminary tax levies for both of the county’s unorganized territories, final levy for the Crow Wing County Housing and Residential Authority, benefit plans for all non-contract employees, wages for county elected officials, per diem rates for appointed citizens service on advisory committees and the planning commission/board of adjustment and the public hearing date for the final budget and levy resolution.
In the First Assessment District, the levy is preliminarily set for a 5.5% increase to $1.13 million. In the Second Assessment District, formerly Dean Lake Township, the levy would increase by 29% — $61,202 compared to $47,450 in 2021. This increase is due in part to a clerical error in 2020 that led to residents being taxed according to a $36,000 levy instead of a $62,000 levy.
The levy for the HRA saw no change between 2021 and 2022, remaining at $729,500.
All of the county elected officials will see raises next year, with County Attorney Don Ryan’s salary increasing the most. Ryan will earn $159,887 in 2022, which is $8,540 more than his 2021 earnings, a 5.6% increase. Sheriff Scott Goddard’s salary will also increase by nearly the same amount — 5%, or $6,204 more for a total of $130,284. County commissioners will earn $42,295 in 2022, or $1,232 more than last year, a 3% increase.
There were no changes to per diem rates for meeting attendance for citizen committees. Those will remain at $75 for most committees and $125 per meeting for the planning commission/board of adjustment, members of which also earn $75 per site visit. County employees are excluded from earning per diems.
The public hearing on the final budget and levy is set for 6 p.m. Dec. 14, at which time residents can share their opinions during what was once known as a truth in taxation hearing.