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St. Louis County Board sets 1.8 percent upper limit for tax increase

Home and business owners across St. Louis County could see up to a 1.8 percent property tax increase on the county's share of their 2012 tax bill. The County Board on Tuesday set 1.8 percent as their maximum possible levy limit, meeting the state...

Home and business owners across St. Louis County could see up to a 1.8 percent property tax increase on the county's share of their 2012 tax bill.

The County Board on Tuesday set 1.8 percent as their maximum possible levy limit, meeting the state deadline to approve a top-end number. The number can come down but can't be higher when the board sets its final budget and levy in December.

The county would spend about $110 million of property tax money in 2012, up from $108 million this year.

The extra money would go in part to make up for state cuts in aid to the county, especially for court and corrections services, but also to make up for state cuts in adult mental health services.

Commissioners also favored 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 would raise taxes by about 0.5 percent to add another $550,000 to that effort to improve roads, especially those that see more than 100 cars a day.

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Mental health services will account for another roughly $300,000, or 0.3 percent, as the county tries to maintain services the state has cut funding for.

"Either we help these people in managing their condition, or we end up spending so much more in emergency room care or to house them in our jail," said Commissioner Peg Sweeney of Proctor.

And county officials have added another 1 percent increase to cover huge projected increases for Arrowhead Regional Corrections, a multicounty agency that operates adult and juvenile detention centers. ARC still has not set its final budget, of which St. Louis County pays 80 percent.

"We felt we can get to 1.8 percent, but the fact is we aren't there yet," County Administrator Kevin Gray said. "We may have a lot more cutting to do just to get down to 1.8 percent."

The budget and preliminary levy was approved 5-1 by commissioners. Only Commissioner Chris Dahlberg of Duluth, who favored no levy increase, voted against the resolution. Commissioner Steve Raukar of Hibbing was unable to attend Tuesday's meeting in Duluth.

Dahlberg called for cutting more out of the budget to keep the 2012 levy the same as 2011.

"There are people out there who are on the edge and really having difficulty making ends meet," Dahlberg said. "And I have to ask, are we putting them over the edge?"

But County Board Chairman Steve O'Neil of Duluth said the county faces the reality of having nearly 12 percent of its residents, about 23,000 people, apply for some sort of social service assistance in 2011. The county has an obligation to serve those residents as well, O'Neil said.

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The county's tax increase doesn't include any new taxes charged by cities or school districts, which will probably send tax bills higher yet.

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 budgets at 2011 rates.

The county's overall budget for 2012 would be about $306 million, but nearly two thirds of that is so-called "pass through" state and federal money for highway, bridge and social service programs.

The county will hold public meetings on the final budget Dec. 1 in Virginia and Dec. 8 in Duluth.

The Lake County Board on Tuesday also set its preliminary levy increase for 2012, coming in at a 2 percent increase.

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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