St. Louis County Board approves budget, tax hike

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• Where your St. Louis County tax dollar goes

St. Louis County commissioners on Tuesday adopted a 2012 county budget that will spend a little more money than in 2011 and raise taxes on homes and businesses by 1.8 percent.

The portion of the county’s budget paid for by property taxes will go up from $108 million to $110 million, with the extra money going to pay for a gravel road improvement program and for increased costs for regional corrections.

The county has about 3,000 miles of roads, 1,600 miles of which are gravel, and many of those roads are crumbling because of a lack of long-term maintenance, county officials said.

The board voted 6-1 in favor of the 2012 budget and tax increase, which most commissioners described as modest and necessary because of large cuts in funding from the state.

“There will be no county budget shutdown on Jan. 1, because we did our job,” said Commissioner Peg Sweeney of Proctor, contrasting the county with state and federal government budget stalemates.

“Of the 87 counties in Minnesota, we are one of the most stable financially,” said Commissioner Mike Forsman of Ely.

Commissioner Keith Nelson of Eveleth said holding the increase to 1.8 percent while absorbing cuts from the state and maintaining services was “truly remarkable,” but he cautioned commissioners not to “break your arm patting yourself on the back because we’ll have a lot of work to do next year.”

But the county’s 1.8 percent increase won’t be the only impact on property owners’ tax bills in 2012.

State lawmakers eliminated the homestead property tax credit for 2012, which reduced the value of property the county can collect money on. Owners of all properties will have to pay more to compensate for the loss of state reimbursement to the county.

That increase will add another 6 percent or more to the average county tax bill without any increased spending. And that doesn’t include any increase from school districts and cities or townships. Many homeowners across the county will see double-digit tax increases when all the impacts are added up.

“There’s been a lot of hand-wringing by commissioners that they didn’t like raising taxes 1.8 percent, but then saying 1.8 percent is really not that bad. The fact is, that 1.8 percent is on top of the 6 percent from the state … and it’s really starting to add up,” said Commissioner Chris Dahlberg of Duluth, the only commissioner to vote against the budget. “In a good economy, people may not notice another 1.8 percent. But times are tough, and 1.8 percent is too much this year. I think we could have got it down closer to zero with a little more work.”

The county’s overall budget for 2012 will hit $308 million, but nearly two-thirds of that is pass-through money from state and federal sources for services that the county administers but doesn’t pay for.

By far the longest discussion on the budget Tuesday came over a proposal by Nelson who wanted to see an extra $500 in the budget to pay the board’s vice chairman in 2012. That position currently receives no extra pay, above the base $55,700 annual salary, and Nelson said the extra work warranted an extra stipend.

But Forsman protested, saying the board shouldn’t vote itself even a tiny budget increase when county employees are getting no raise and taxpayers are facing tough times.

In the end the two compromised: The board lowered the annual stipend for the board chairman from $1,500 to $1,000 and will give the remaining $500 to the vice chairman, so there is no increase in the overall budget.

The 1.8 percent levy increase is roughly in the middle among the 2012 levies proposed by Minnesota’s 87 counties.

Seven counties cut their levies from 2011 to 2012, led by Anoka, which slashed its budget by 5.2 percent. Hennepin County sought a 1 percent increase for 2012 while Ramsey asked for 1.7 percent. Thirteen counties asked for no levy increase. Smaller counties seemed to show the highest increases, including 7.1 percent for Aitkin, 3.6 percent in Carlton, 2 percent in Lake and 2.7 percent in Cook. Pope County asked for a 15 percent increase with Waseca at 14 percent and Lincoln at 11.2 percent.

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