Property taxes explained at Truthin Taxation meeting

Brian Larsen

In taking a hard look at the county’s struggles to maintain a consistent “manageable” levy without dipping into the fund balance, the county board has decided to embark on a one year plan which calls for a higher than average levy. It’s a plan they believe will right the county’s finances for years to come.

It’s a plan, however, not favored by a majority of the people who attended the Monday night, November 27 Truth-in-Taxation meeting held in the commissioners’ room.

In September the county board set a preliminary levy of 19.9 percent which would generate $9,428,872. Along with the levy, the commissioners will use $5,565,558 in state grants and aid, $3,518,632 from transportation sales tax, $3,108,383 in federal grants, $993,050 from charges and $971,649 from all other revenue in order to meet expected expenditures of $23,661,992. Expenditures and the levy have both increased over 5 percent a year, on average, since 1989. The levy in 1989 was $2,731,217. In 2016 it was $7,700,780 (8.5 percent) and last year it was $7,863,947 (11.2175 percent).

“The significant leap in expenditures over last year is due mostly to $4 million in bonding we will use to fix County Road 17 and begin improvements to the Pike Lake Road,” Powers said. “We will use the one-half percent local transportation sales tax collections to pay for those bonds.”

The taxable market value of all taxable property in Cook County is expected to be $1,573,875,645, which is about what it was last year, said Auditor/Treasurer Braidy Powers.

In 2001, the county levy represented 45 percent of all the local levies. In 2017, it is projected to be 39 percent of our expenses. Historically it’s been in the 30 percent range for most Minnesota counties, said Powers, adding, “So we’re getting there.”

In 1996, state aid covered $288,050—2.52 percent—of the county’s budgeted expenditures. In 2017, state aid (called general county aid) is expected to be $462,962, an increase of $183,000 over the previous year. However, noted Powers, “We lost $113,000 from ‘in-lieu of tax’ payments from the state, so we only gained $70,000. Todd (Cook County assessor) Smith has resubmitted those numbers to the state to see if we can get more money back.”

Seasonal residents paid 47.5 percent of Cook County’s property taxes in 2017, and homesteaders paid 23.3 percent.

The proposed budget the county board will finalize before December 29, 2017, includes an increase of 5.1 percent in the cost of employee health insurance. It also includes $170,000 to support the YMCA. The county will fund the current Community Center for $79,660.

Cook County Administrator Jeff Cadwell explained that for the last several years the county has been working with an unbalanced budget. Over the previous eight years, Cook County added 10 people to its payroll.

Without staff said Cadwell, “We cannot deliver vital and mandated services.” He cited the county board’s work with Ehlers & Associates, who helped in setting a budgeting plan that should work well into the future.

If the county board sets a levy around 19 percent, Cadwell said the 2018 budget would be balanced. Driving the high tax this year are deferred bills, increased caseloads, maintenance of facilities, and upcoming road projects, he said.

On Tuesday, November 28, Commissioner Heidi Doo-Kirk made a motion to set the levy at 18.9 percent, but she didn’t receive a second. Powers said the budget committee, which he is a member of, will look at making further reductions and submit those for consideration to the board at the commissioners’ next meeting.

At the Truth-in-Taxation meeting community members were given three minutes to speak.

Bob Mattson, Grand Marais, told commissioners, “You have a lack of empathy” for taxpayers, young people, people living on a fixed income. He suggested the county’s budget should be shared pain between county departments and taxpayers. “You have allowed it to become a one-way street and the taxpayers don’t like it.”

Lloyd Speck, Grand Marais, suggested 10 percent of the budget could be cut by getting rid of the Grand Marais/Cook County EDA and Mr. Cadwell’s position. Speck said the EDA had cost the county $3,244,690 over its lifespan.

Don Davison said he used to listen on the radio and hit songs earned the great compliment of “Number 1 with a bullet.” Davison said he had looked at the Minnesota Department of Revenue preliminary 2018 property tax levies for counties and found that Cook County’s proposed 19.9 levy was “more than twice as high as the next county listed.” That designation, said Davison, earns Cook County “Number 1 with a bullet,” but in this case, that’s not a good thing. As far as the budget, he said “It seems to be you took what you had and added what you wanted.” He called the system flawed.

One gentleman asked if the board had any money in its budget for special elections. He hinted that he would like to see one shortly if the levy wasn’t lowered.

Bob Pratt, Hovland, pointed out that there was a significant disparity in the county between people who have money and people who don’t have money. He asked commissioners to think about the people who couldn’t afford to drive to the county line versus others who had money to travel near and far.

Ben Peters said he was frustrated and felt duped by the actions of the board.

“We talked about the same stuff last year, and here we are again, talking about the same stuff again. Nothing has changed,” Peters said. He said the title of the meeting “Truth-in-Taxation” lacked truth. “The truth is you don’t care or don’t listen, or you lack the courage and skill to make cuts,” Peters said.

Jennifer Shoals said she appreciated the board’s work, but, “I live on a small disability check. My taxes have doubled in the last four years. I support the use of my tax dollars.” But, she added, she has no extra money to make house repairs and can’t sustain higher increases in her taxes.

Anna Hill asked commissioners to think about people who might lose their houses because of too-high taxes.

Diane Hagen told commissioners she lived on a fixed income. “When we can’t pay our taxes, where do we go?” she asked.

One gentleman said he spoke for most of the county and he praised the commissioners for their work on the budget and commitment to public service.

Nick Burger said the budget proposal was made through “a false narrative.” He said when commissioners or the administrator talked about former county boards “kicking the can down the road,” but when it came to setting budgets, three current members of the board had their “bootprints” all over that can. “No attempts have been made to cut costs,” said Burger.

Carol Burger said of the five commissioners only District 1 commissioner Bobby Deschampe seemed to have any empathy for taxpayers. Carol ran through a litany of cuts she thought the board could make.

Both Nick and Carol ran over their three minutes and were cut-off by board chair Jan Sivertson. Sivertson repeatedly warned people that if they clapped or cheered during the meeting, she would end the session.

About a dozen more people spoke, most calling on commissioners to find a way to vastly lower the proposed levy of 19 percent. Commissioners decided the next day to designate December 12 as the day they would set the 2018 levy.

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