County Taxes to Increase

Written by Jeff Johnson on December 21, 2009. Posted in General

County Board Raises All Three County Tax Levies – One by 4.95%, One by 114% and One by 176%

The county board adjourned for the year last week by raising every property tax levy we have authority to raise.

The general county operating levy was increased 4.95% (an additional $12.5 million over 2009). The county rail authority levy – used to fund light rail trains – was increased 114% (an additional $8 million over 2009). The county housing authority levy was increased 176% (an additional $2.3 million over 2009).

Commissioner Randy Johnson and I voted against the budget that included the 4.95% levy increase. I was the only member to oppose the other two levy increases.

The proposal from county administration that came to the board last week included a 3% county operating levy increase. Commissioners Callison and Stenglein moved to increase that tax hike to 4.95%. Interestingly, Commissioner Mike Opat joined Randy Johnson and me in opposing the amendment to raise the levy increase. Once that amendment passed, however, Commissioner Opat voted for the final budget that included the 4.95% increase.

It’s important to note that county spending is actually decreasing between 2009 and 2010, but because that decrease is more than offset by cuts in state aid and losses in other areas, the property tax levy is increasing to balance the budget.

Overall, the 2010 budget will be about 6.8% lower than the 2009 budget. That’s the number you will hear from the county and media. More than half of that budget reduction, however, is simply a decrease in federal and state aid for child care services which used to “pass through” the county and now will be paid directly from the state to child care providers. In other words, the county will no longer be the middle-man in this transaction. Another portion of the budget decrease results from the conclusion of two large environmental services contracts that are not being renewed.

The actual cuts to county operations/services equal a little under $25 million. That represents a real cut in the county budget of about 1.5%.

Despite the cut being nowhere near the 6.8% we tout, I don’t discount the fact that the budget is decreasing. Government very seldom gets smaller from year to year and I give great credit to county administration for finding a way to do this.

Where will the new tax money go? A portion of it is dedicated to Hennepin County Medical Center (“HCMC”) to partly compensate for a loss in state aid they are anticipating due to the elimination of the GAMC medical care program Governor Pawlenty unalloted earlier this year. The rest will go into the county’s reserve fund.

To say, however, that taxes are being raised to fund HCMC is a little misleading. That is no more accurate than to say we raised taxes to fund “transit-oriented development”, sex education teachers in the public schools, an $80 million bridge in North Minneapolis or anything else the county is funding in 2010. I could take anything included in the 2010 budget and claim that as the reason (or one of the reasons) for raising the levy; if we chose not to spend money on some of these other budget items, we would not need to raise taxes to provide more to HCMC.

Before last week’s meeting, I reviewed the general property tax levy increases in Hennepin County for the past 30 years. The levy was increased in 29 of those years. The one exception was a half-percent decrease in the levy between 1982 and 1983. Overall the levy has increased an average of over 6% each year during that period – well in excess of inflation.

Here’s the levy history:

 

That history provides a rebuttal to both of the major arguments I heard for raising the levy this year: The economy is terrible and state aid is decreasing.

As I look back on the past 30 years, the county has raised taxes in very good economies and very bad economies. It has raised taxes when state aid is increasing (18 of the 30 years) and when state aid is decreasing (12 of the 30 years). This year is not unique in its need for a tax increase. In fact, it holds true to the overriding principle in every other year: Government always wants more money from taxpayers.

We did not raise taxes in Hennepin County because the economy is terrible and we didn’t raise taxes because the sinister Tim Pawlenty cut GAMC – we raised taxes because we love to spend taxpayers’ money. Period.

Bottom line for me, the economy IS bad and people are struggling, but it’s not just those who receive government benefits who are struggling; the folks who pay for those government benefits are struggling, too. And if there ever was year in which we could break from the norm and not ask for more from our constituents, 2010 would seem to me to be such a year.

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