St. Louis County Board to set maximum tax levyWith a chunk of new money from the state for 2014, the St. Louis County Board will have an easier time setting next year’s budget without a major tax increase.
By: John Myers, Duluth News Tribune
With a chunk of new money from the state for 2014, the St. Louis County Board will have an easier time setting next year’s budget without a major tax increase.
Along with the new money, state lawmakers also sent orders restricting local governments on how much they could raise property taxes. The result should be a modest increase next year in the county’s share of property taxes, if any, when county commissioners set their maximum levy today in Duluth.
The extra state money and some penny-pinching by county administrators should come close to balancing the 2014 budget without extra help from taxpayers, even with higher costs for health care, payroll and other items, such as the county’s Camp Esquagama summer youth camp.
The one sticking point is a huge new loan, or bonded indebtedness, the county has taken on for 2014 to totally refurbish the Government Services Center in downtown Duluth. That $21 million project will cost the county about $1.7 million in 2014 for an interest-only payment as construction begins. That’s roughly 1.5 percent of the county’s overall levy-funded budget.
It appears the county administration will propose a similar levy increase to cover that interest cost.
“That’s what it looks like right now,’’ Commissioner Frank Jewell of
The county also will take on debt in 2014 for its share of improvements to the Northeast Regional Corrections Center.
County staff members said the state’s restrictions on levy increases for 2014 appear to allow St. Louis County up to a 2.04 percent increase, especially for bonding issues, but that any increase proposed today would be less than that.
“Our focus has been on delivering core services and making strategic
investments. We’ve also looked at ways to be more efficient and to reduce assessment costs for local units of government, which will provide property tax relief for our citizens. We have found ways to absorb increased costs,’’ said Kevin Gray, county administrator. “As a result, I anticipate any levy increase will be limited to supporting debt service related to renovation costs of the Government Services Center and for other critical
Gray also noted that, for the first time since the Great Recession hit in 2008, there’s been an uptick of new construction in the county, adding value to the tax base and spreading the tax liability out so less has to come from each property owner.
County Board Chairman Chris Dahlberg of Duluth said he will again push for a zero percent increase for 2014, but that he’s willing to listen to the county administration make the case for a small increase to cover the bond interest. The county also could dip into reserves if needed.
“I’m hoping we can live within our means without any increase, and I think there’s some wiggle room to do that,’’ Dahlberg said. “But I’ll also take a good look at their issues with the bonding.”
The levy increase set today, if any, will be the highest possible increase. The County Board will set the final levy Dec. 17. It can go down, but not up, from today’s amount.
The county’s levy increase for 2013 was 1.5 percent over 2012. It was the fourth straight year the county’s share of property taxes rose by less than the rate of inflation, county administrators noted. The county’s overall budget rose from $308 million in 2012 to $311.5 million in 2013. Nearly two-thirds of that is “pass-through” money from the state and federal governments to pay for roads and bridges, health and human services and other programs the county oversees.
The portion of the overall budget that comes from property taxes hit $111.7 million in 2013, up from about $110 million in 2012.