Proposed county levy up 3.2 percent
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By MARK GUNDERMAN
mark.gunderman@lee.net
Sunday, November 2, 2008 9:05 AM CST
County Administrator Bill Reynolds thought he would have a few years to get ready for the financial storm that would inevitably hit Chippewa County’s budget. Instead, the first time he was fully in charge of the process, he found the future is now.
“This budget was tough,” Reynolds said about the proposal published in the Chippewa Herald on Sunday, Oct. 19, and the budget which will have a public hearing Nov. 12.
“The next (budget) is going to be tougher,” Reynolds predicted.
Taxpayers, of course, don’t much care how tough the budget was for Reynolds to put together. They want to know how tough it’s going to be on them.
The bottom line is a 3.2 percent increase in the property tax levy, from a nearly even $14 million in 2008 to $14.45 million for 2009.
The good news is that the tax rate — the amount taxpayers pay per $1,000 of assessed property value, is slated to decrease from $3.33 to $3.26. The reason for the decrease is that the total value of property in the county is estimated to increase by 5.6 percent, spreading the higher tax levy over higher property value.
What that means is that a person with a $150,000 home would have paid $499.50 in county-purpose property taxes in 2008, but would only pay $489 in 2009 if the home were still worth $150,000. But chances are that home is worth more than it was the year before.
So how much an individual property owner pays will depend on how the value of the property was adjusted. Also, keep in mind that the county levies only part of the total property tax bill. The school district and local municipality levy typically larger shares.
A property tax bill consists of taxes from either a city, village or town taxes, the county, local school district, vocational school district and the state forestry tax.
The amount of the county’s tax levy and tax rate are limited by state law, based on the previous year’s figures and property value growth. The county is levying the maximum allowed. Getting there was not easy, according to Reynolds and County Auditor George McDowell.
Highlights include no increase in property tax money for the highway department and only a one percent increase for human services. The Sheriff’s Department is also losing its chief deputy position with the retirement of Captain Jim Clark.
In addition, some departments and programs that had been soaking up sales tax dollars will see their funds cut. Requests of $50,000 for the Land Conservation Stewardship Fund, $100,000 for Forest and Parks Capital Improvements, and $100,000 for Forest and Parks Quality of Life Fund were turned down. The highway department will receive nearly $183,000 less in sales tax dollars than it has been receiving in recent years. human services loses 14 contracted positions.
In an Oct. 2 letter to the Executive Committee, Reynolds spelled out the budget problems, which started with a $1.45 million deficit.
“As is not a surprise, wages and fringes continue to be the driving force behind our budgetary issues. We continue to experience the same problems as other counties in the state. Part of the problems can also be attributed to a 15 percent decrease in revenues that we have estimated from that budgeted in 2008 to 2009,” Reynolds said in the letter.
The revenue decrease is partly due to internal transfers between funds, but also a decrease in the amount the county earns in investments on its excess funds, anticipated drops in license and permit fees as well as fines and forfeitures.
Some of this is due to economic downturn.
“We already know the Zoning Department has seen less in permits,” Reynolds said.
Also, the county is taking part in a state-led overhaul in long term care for people in nursing homes or with special needs. There may be savings in the long run, but in the transition, the county is taking a $164,000 hit.
The county had some anticipated layoffs in Human Services because of the long-term care reform, with those layoffs balanced by a drop in revenues from the state to pay for the services, which are now being administered by an outside agency.
Besides that, the county reduced the Human Services department by 14 contracted positions. Reynolds said many of those were in the Guidance Clinic, which had been taking what he called “paying customers” instead of just serving as a crisis intervention agency. Those paying customers, usually with health insurance, can go to private providers, reducing demand at the county clinic.
“We made the decision to change the mental health clinic to crisis services,” Reynolds said. “The management of the clinic has been very receptive to the change in the focus.“
Also stressing the budget is the need to replace two chillers, with a single energy-efficient model, for the courthouse complex, at a cost of $300,000. That will be paid, as a capital expense, by sales tax dollars.
That extra expense and a decrease in revenues is why cuts are being made in how sales tax money is usually spent.
“There’s not as much applied this year,” said McDowell. “We were down 10 percent, then it recovered, then went down again, then back up.“
In the long run, the county budget is headed for the wrong end of a curve in which rising payroll and health insurance costs exceed revenues. Given that and anticipated hard economic times ahead, future county budgets are likely to include more cuts.
If you go
Chippewa County's annual Budget Hearing will be held at 7 p.m. Thursday in the County Board chambers, Room 302 of the courthouse, 711 N. Bridge St. Keep in mind that with the opening of the third court branch, the board room is now on the third floor.
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yepper wrote on Nov 3, 2008 11:16 AM: