Dave Olson, Published September 13 2010
Clay County readies budget for 2011The Clay County Commission is likely to vote Tuesday on a preliminary budget for 2011.
Then it will cross its fingers because once a preliminary budget is set, it cannot be increased.
The fear county officials have is that state lawmakers will make deep cuts in state aid to local governments in 2011 in an attempt to balance an expected state budget deficit of close to $6 billion.
County officials have wrestled with about $2 million worth of cuts to state aid since 2008, and the budget proposal that will be put before the commission on Tuesday anticipates at least $350,000 in cuts next year.
If the proposed county budget is approved, the tax levy in 2011 would be
$24.3 million, a 4.45 percent increase from 2010.
Because of growth in the value of the county tax base, however, the net increase to individual property owners would be 2.45 percent.
If not for the cuts in state aid, there would be no need to increase the levy, said County Administrator Brian Berg, who is sharing the job with Vijay Sethi until Sethi retires at the end of the year.
“Really, there’s no growth at all in (the budget),” Berg said. “Any increase you’re seeing in the levy is due to state aid reductions.”
Under the proposal on which the commission will vote on Tuesday, the county portion of a property owner’s taxes would go up by the following amounts, assuming no appreciation in home values year over year:
- For a home valued at $100,000, taxes would go up $7.43.
- On a $150,000 home, taxes would go up $11.14.
- On a $200,000 home, taxes would go up $14.85.
Because of the uncertainty surrounding state aid next year, the county has established a contingency plan to deal with potentially drastic reductions in revenue.
Options range from not filling vacant positions, something the county is already doing, to imposing mandatory furloughs and cutting services and staff.
Sethi described the latter options as “a very last resort.”
Clay County has about 360 full-time employees and about 100 temporary or part-time employees.
The county is expected to pass a final 2011 budget in December.
Possible money-saving areas
If Minnesota lawmakers make deep cuts in aid to local governments in 2011, Clay County may look to these areas to save money (in descending order of priority):
- Leave vacant positions unfilled (already being followed).
- Assign indirect central administration and auditing/accounting costs to the solid waste fund.
- Consider increases in service fees.
- Continue voluntary furloughs (current savings amount to $40,000 a year).
- Reinstate early retirement incentives.
- Cut department budgets and what is given to external agencies proportionally.
- Use fund balances with the option of using the levy to make up for revenue lost to unallotments, cuts in market value credits.
- Institute mandatory furloughs (a last resort).
- Reduce service and cut staff (a last resort).
Readers can reach Forum reporter Dave Olson at (701) 241-5555