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St. Louis County Board mulls tax increase

St. Louis County commissioners on Tuesday discussed their options for the 2012 budget and tax levy that likely will include a tax increase for a gravel road improvement project and to cover court and corrections costs.

St. Louis County Board
St. Louis County Board

St. Louis County commissioners on Tuesday discussed their options for the 2012 budget and tax levy that likely will include a tax increase for a gravel road improvement project and to cover court and corrections costs.

The board appears headed to a roughly 1 percent to 3 percent levy increase -- the part of the county budget paid by local taxpayers -- when commissioners set the uppermost levy increase on Sept. 13.

"While a lot of cities and counties are looking at pretty steep increases of 4 or 5 or 6 percent or more, we're committed to keeping this under the rate of inflation" of about 2.85 percent, said Kevin Gray, county administrator.

Ultimately, county commissioners will decide next week exactly what to cut, what to fund and how much taxes go up. State law requires local governments to set their maximum potential tax increase in mid-September, although that number can come down when the final 2012 budget and levy is set in December.

Commissioners meeting as a committee of the whole appeared to unanimously favor a proposal by county staff to bolster gravel road maintenance by 50 percent in 2012. The county now spends about $1 million a year to keep up more than 1,600 miles of gravel roads. The county plan will raise taxes by a half-percent to add another $550,000 to that effort to bolster roads, especially those that see more than 100 cars per day.

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The county's share of the tax levy also is likely to increase, up to another 1.5 percent, to pay for increased costs for the Arrowhead Regional Corrections system. St. Louis County covers 80 percent of the ARC budget, which is facing a roughly $1.8 million shortfall for 2012 due mostly to cuts in state payments for juvenile and adult corrections and court programs such as probation officers.

St. Louis County could face up to $1.5 million of the ARC shortfall, which by itself would amount to a 1.5 percent tax increase. But ARC officials won't set their final budget until Sept. 16, and it remains unclear what the final impact might be for member counties.

Possible cuts in ARC programs could include the popular drug and DWI diversion courts, which work to keep offenders out of jail and in treatment while on the road to finding employment. Juvenile programs aimed at keeping kids out of jail also could be on the chopping block.

"These are programs that work really, really well to keep kids out of the corrections system," said Commissioner Peg Sweeney of Proctor. "If we can find a way to deal with them outside of institutions, then they have a much higher opportunity for success."

Except for the ARC uncertainty, county officials say they will be able to balance their budget again in 2012 without layoffs.

Any increase in the tax levy approved by the county will be in addition to increases from school districts, cities and townships.

The increase also doesn't account for a state-mandated property tax increase approved by state lawmakers during the July special session. That move eliminated the longstanding homestead tax credit and replaced it with a new "market value exclusion." That exclusion reduces how much your house is worth for tax purposes, but it also will reduce the total value of property in each city and county available to tax. That means each home and business owner will have to pay more, an estimated 5 percent to 9 percent more across Northeastern Minnesota, even if local governments freeze their 2012 budget at 2011 rates.

John Myers reports on the outdoors, natural resources and the environment for the Duluth News Tribune. You can reach him at jmyers@duluthnews.com.
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