The Mille Lacs County Board of Commissioners on September 29 approved a preliminary tax levy of $22,339,589, which is an increase of 24.5% over 2020.
The proposed increase, the maximum allowed, is barely keeping on track with inflation (around 2%), according to board members. “Twenty-five percent is quite a shock to the public,” noted commissioner Tim Wilhelm.
Several factors are contributing to the increase: the lawsuit by the Mille Lacs Band (which totaled 16% of the levy last year), out-of-home placement costs, doubled from 2013 to 2020 (14% of the levy, approx. $2.5 million in 2020, two-thirds of which is not reimbursed), along with wages and health insurance premiums that continue to rise. The proposed increase also includes unforeseen expenditures.
“There is some catching up to do to keep our level of funding where it needs to support our operations,” Mille Lacs County Coordinator Dillon Hayes stated.
There was discussion of how much the reserve can be reduced via board action, including communication with the legislator of possible reimbursement for out-of-home placement costs.
“The wish of the Board is to not have to do this, but we have to. It’s going to be very hard on the residents. We are talking a $2 million out-of-home placement cost that does not get reimbursed,” said commissioner Genny Reynolds, “that is something we should be going to the legislator about, to see how we can get reimbursed.”
In some states, out-of-home placement costs are completely covered. Hayes said he was confident that the Association of Minnesota Counties is supportive and that it would become one of their priorities. In that scenario, the $2.5 million reimbursement would bring the increase of the levy down to 10 or 11%.
“We are going to keep whittling down the budget,” said commissioner Roger Tellinghuisen, “before the final one [budget] in December.”
Another reduction possibility discussed, but not accounted for, was state employee salaries, such as additional staff time related to COVID procedures. Anyone that spends more than 50% of their time on COVID-related items, can have their salary fully reimbursed. But conversations with staff regarding those matters have not yet occurred. At best, those reductions would account for 1.5%-2%.
The biggest expenditure is replenishment of the reserves, budgeted for $2 million currently, as opposed to the $6 million figure they should be at. If that were eliminated, the levy would be down to a 13% increase from last year. One concern is that only restricted funds are available in the reserve, and the 2020 audit results have yet to be given.
“Obviously 24.5% is higher than many want to see it,” Hayes stated, “and we are all very aware of the impact that is going to have. But we do have two months to continue working on it, and we are going to do everything we can to get that down to an acceptable figure. A lot of work is ahead, but we are up for it.”
The resolution to pass the preliminary levy was approved by a 4-1 vote, with commissioner Tim Wilhelm voting against the resolution. The final vote for the tax levy will occur on December 2, 2021 at the regular board meeting.
“My interaction with farmers is that they don’t like it but they understand it,” said commissioner Phil Peterson. “The reality is this is where we are right now.”