MANKATO — The Blue Earth County Board appears ready to set a preliminary 6% tax levy increase for next year.
Commissioners told county officials Tuesday they were comfortable with the increase to keep up with increasing staff and infrastructure costs as well as unfunded state mandates.
The county is planning to run a $1.4 million deficit on a budget of more than $100 million next year. County officials say the increased levy will go toward increased staffing costs, future construction projects and equipment needs, and demands for more services.
That includes five new staff members, such as an IT security position and a part-time community health educator. County Administrator Bob Meyer also said the county is planning for a 10% health insurance increase, similar to the increase Blue Earth County had in July.
“We’re hoping that that maybe will be a little better but wanted to build in some cushioning given the cost increases we’ve been seeing the past couple of years,” Meyer said.
Other budget items include $300,000 for network technology equipment, $700,000 for part of the county’s new tax system equipment, $750,000 for repairs to the Blue Earth County Historic Courthouse tower and $180,000 for large-scale snow-removal equipment, among other things.
The County Board must set a preliminary tax levy by the end of the month. Commissioners have the option to lower the levy before finalizing the 2020 budget at the end of the year.
Much of the levy will be absorbed by taxable market value growth, which increased in Blue Earth County by an estimated 4.7% this year. A lot of that growth came from increased property values, however, meaning the county’s portion of property taxes will likely be slightly higher for homeowners.
Agricultural land, which has decreased in value in recent years, is expected to increase by 6.9% on average while residential property will increase by an estimated 5.9% on average. Even apartments, a fast-growing housing segment in Mankato, are expected to increase in value by 1.4%.
That means a homeowner with a $195,000 house — the county’s average home value — could expect to see the county portion of their taxes increase by about $59 under the county’s current plans.
A farmer with property estimated at $530,000, the county average, could expect to see an increase of $90 in county taxes.
Commercial property is expected to decrease by 1.4% in average value according to Michael Stalberger, the county’s property and environmental resources director. That could mean a savings of about $14 on the average commercial property worth $674,000.
Commissioners unanimously supported a proposed 6% increase, though some had reservations.
“I always am concerned about a deficit budget,” Commissioner Colleen Landkamer said. “... I understand using fund balances and set-asides for capital projects, but I think, you know, it’s something to think about. We’ve got big projects going on and if you’re looking at a new public works building ... you’ve got to think about what’s coming in the future.”
Meyer said the budget is meant to address worst-case scenarios and has built-in contingencies in case of a financial crisis. The county also plans to spend down some of its reserves.
Commissioner Vance Stuehrenberg said Blue Earth County’s tax levy increase won’t impact area residents as much as similar increases in nearby counties because the county’s tax rate is lower than most.
“A $200,000 house would pay $702 in Blue Earth County, whereas in Nicollet County it’s $1,004,” Stuehrenberg said. “That’s a huge difference. When people see in the paper that Nicollet County’s only raising 2% and we’re raising 6%, they think, ‘Oh my gosh, Blue Earth County’s off base,’ except that their tax rate is already a lot higher than ours.”