MANKATO — Working under the assumption that state law restricted Blue Earth County to a zero percent increase in property taxes for 2014, county leaders spent the summer preparing a budget based on frozen real estate tax revenue.
Last week, the Minnesota Department of Revenue released a different interpretation of the levy limits approved by the Minnesota Legislature in May. Under that reading of the law, Blue Earth County could have bumped up property taxes by 6.7 percent and collected an additional $1.9 million next year.
County Administrator Bob Meyer and the County Board showed no interest, however, in going on a last-minute spending spree with the additional levy authority. Tuesday's board meeting was the last one before the state deadline for setting a maximum levy for the upcoming budget year, and the board stuck with the flat levy they'd been discussing for the past three months.
Had the Department of Revenue's interpretation of the levy formula been released earlier, the administration might have advised the board to give more consideration to some of the additional staffing requested by county department supervisors, Meyer said. Still, he expects the board would have ended up at a no-increase levy anyway.
"It might have changed the dialogue a little bit in the past few months," he said. "At the end of the day, I don't think it would have changed the outcome."
The Democratic state government boosted state aid to the county by about $450,000 and exempted counties from paying the state sales tax on purchases, something that's also expected to bring big savings. With that boost in revenue and no emergency spending confronting the county, the board was facing little incentive to support higher taxes.
So the county will collect just over $29 million in property taxes next year, the same as this year, to finance an $85 million budget that's supported by federal and state funding along with real estate taxes.
Some reserve funds also will be used to keep next year's budget in the black, although the bulk of the spending from savings reflects the timing of receipts and expenditures rather than a structural imbalance. For instance, state funding for an expensive improvement to County Road 17 east of Mankato arrived this year but payments to contractors will continue into 2014.
"It's money we've already taken in for bills that are going to be paid (in the future)," said Commissioner Vance Stuehrenberg. "That's what a majority of it is."
The levy and budget received unanimous support and praise from the board.
"Good work by the administration and the staff to make it possible," said Commissioner Mark Piepho of Skyline.
The final budget will be approved after a public hearing the night of Dec. 3.