Board Votes “No” to Tax Cut, “Yes” to Stairmasters
Yesterday the County Board held our final meeting in the 2012 budgeting process (prior to the Board meeting on Dec. 13 when we approve the budget and tax levy amount). The proposed budget before us yesterday contains an actual cut in county spending of approximately 3% ($50 million) and no increase in the total property tax levy. We would need to cut spending in order to hold the levy flat due to the loss of money from other revenue sources, such as the state and federal government.
Despite the fact that the proposed budget does not include a tax increase, many county residents received their tax statement last week showing their property taxes increasing – some by double digits. That could happen for several reasons: 1) Changes in your home value as compared to the average valuation change in the county; 2) A change to state law this year that shifts the property tax burden from lower-valued homes to higher-valued homes and commercial property; and/or 3) Possibly tax increases at other local levels of government such as your city or school district.
Yesterday’s meeting provided an opportunity for Commissioners to offer amendments to the budget before our final vote in two weeks.
I offered an amendment to cut the general property tax levy by 2.56% (just under $17 million). That amount is what our Budget/Finance Department told me would be necessary to hold the median-value home in Hennepin County harmless from a county tax increase. My proposal failed on a vote of 1 – 6.
I found the $17 million in the proposed budget for this levy cut from the $23 million contingency budget for 2012. Every year the county levies tax dollars to place into a contingency fund to cover unforseen or emergency expenses or unexpected cuts to revenue (such as a mid-year cut to county aid from the state). We consistently set aside entirely too much for contingency, however, and then end up rolling what’s left over every year into our fund balance, part of which we use to fund projects the next year.
In 2011, for example, we levied for a $21.6 million contingency. As of today, we have spent just over $400,000 of that (yes, that’s less than 2%). That will leave us with over $21 million unspent in the contingency fund at the end of the year. Last year, the unspent amount was $8.8 million. The year before was $15.4 million. In the past 8 years, we have over-levied for contingency by more than $90 million.
Obviously, we are not using our contingency fund for the purpose it is intended – emergency spending. And we clearly will not need anything near the $23 million being proposed for contingency in 2012. So, amazingly, we could cut the property tax levy in a way that would hold the “average” homeowner harmless from a county tax increase without cutting a single program.
This would not, by the way, be “kicking the can down the road” as we have seen to a certain extent at both the state and federal levels of government lately. If we cut the contingency budget by $17 million going forward and were disciplined enough to stay within the $6.2 million contingency budget that remained (which county history suggests would not be difficult), that would be an ongoing change to the budget that would be realized each year. This would not use one-time money to fund a permanent tax cut.
After some discussion, my amendment failed on a vote of 1 – 6.
Just prior to my property tax amendment, the Board passed an amendment to extend the county’s “Trade Time Off for Fitness” program to include the seven county commissioners, the county sheriff and the county attorney (the nine elected officials in the county). This amendment passed on a vote of 4 -3 (with Randy Johnson, Jan Callison and me voting no).
The Trade Time Off for Fitness program allows county employees to trade unused paid time off (PTO) to pay for health club dues or other fitness-related expenses (such as the purchase of bikes or home exercise equipment) in an amount up to $2000 per year. When the program was first created, elected officials were apparently not included in it because we don’t use the PTO system (we self-monitor our time off) and therefore have nothing to “trade” for this $2000 benefit.
The 4 – 3 vote yesterday provided that benefit to each member of the county board (and the county attorney and sheriff), essentially increasing our potential compensation by $2000 (or just under 2%).
I didn’t support this change (and will not take advantage of it even though it passed) as I think it’s fair to say that the taxpayers of Hennepin County already compensate us as commissioners quite well. Yes, some or all of us could probably make more in the private sector, but we each chose to seek this position knowing the compensation level. At a time when taxpayers are seeing increased property tax bills and county employees are wrapping up their second year without a pay increase, this probably wasn’t the best move we could have made.
But hey, at least by this time next year the county board will have some really killer quads.