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County budget battles loom ahead

When the Minnesota Legislature's session ended last spring and lawmakers imposed levy limits, counties were warned they'd have to do some dire belt tightening.

A nearly $1 billion state deficit caused legislators to pass the 3.9 percent levy limit, allowing counties only inflationary increases over the previous year's levy. The limits are in effect for taxes payable between 2009 and 2011. They were adopted to keep rising property taxes from becoming oppressive.

But counties and cities (the levy limits also apply to cities with a population over 2,500) were directed to use state aid payments to lower property taxes, not for increased spending.

Now Local Government Aid and County Program Aid programs could be iffy. How does a state with a $1 billion shortfall help its counties and cities?

Desperate times are here.

Hubbard County commissioners faced a bleak outcome Wednesday when they were asked to set preliminary levies and budgets for 2009 by auditor Pam Heeren.

County departmental requests, revenues, monies for roads and bridges, costs for social services and other wish list items came in at $12,796,430, 20 percent above last year's levy. That includes $3.3 million in special levies, levies outside the state imposed limit.

Special levies can be used to fund certain items such as debt, voter approved levies, natural disaster recovery and other designated items. Counties have to essentially apply for those monies and hope their requests will fit guidelines and be granted by the Department of Revenue.

For the first time, special levies can be used to pay for law enforcement salaries, overtime, holiday pay, benefits, Workers Compensation insurance and liability insurance. If granted, that's where the bulk of the sheriff's department budget would come from in 2009.

Adding in the $3.3 million the county hopes to get from special levies, even if commissioners levy the maximum they can ($8.1 million), they would still need to trim $372,168,557 off the budget to satisfy all departmental needs as is.

The 20 percent increase over 2007 troubled several commissioners, who were told it would likely be offset by a 10 percent increase in taxable valuations throughout the county.

Commissioners peppered Heeren with questions and challenges as she patiently outlined their options and implored the board to "start somewhere."

"Government has to live within its means," said commissioner Lyle Robinson. "It's still a 20 percent increase in taxes. In talking with other counties, they're letting people go. We need to figure if we can continue to do what we're doing."

County coordinator Jack Paul said "some department managers submitted bare bones requests" when they turned in their itemized budgets to the board last month.

Heeren said there were "very little equipment requests" from the county departments. Equipment can usually be a big-ticket item in the budget.

One request, quickly shut down, was for the commissioners themselves. "We can't ask for increased salaries and per diems when we're asking others to do without," said commissioner Doc Carlson. The board agreed and withdrew the request.

And commissioners said even if the special levies are granted, they are still tax dollars.

"We can't ask people who can't make ends meet to pay higher taxes," Robinson said. "The real taxpayer stopped thinking what he'd like to do, but what he can't do so he can pay his taxes."

Hereren suggested that some user fees haven't been raised in almost 30 years, and that if commissioners needed additional sources of revenue, that was an option. "You're targeting the people using them (the services)," she said. "It's another avenue to look at."

Commissioners agreed to take the budget requests home to study, then continue the meeting Sept. 10, when they felt more prepared to set some preliminary levies.