Kandiyohi County tax levy could go up 1.16 percent next year
The Kandiyohi County Board of Commissioners at Tuesday's board meeting approved the preliminary tax levy for 2021. The levy has an increase of 1.16 percent, which could be reduced prior to final approval in December.
WILLMAR — Budget season is always a challenge no matter the year as governments try to balance needs and wants while being fiscally responsible with taxpayers' money. As with so much this year, the pandemic has made it even more difficult since there are many unanswered questions regarding revenue for next year, including program aid coming from the state.
With that in mind, Kandiyohi County Administrator Larry Kleindl presented the draft 2021 budget and tax levy to the County Board on Tuesday.
"This year's budget is a little different, unique," Kleindl said.
The board had two options from which to choose Tuesday. The only difference between the two options was how much money the county would take out of reserves to meet its needs. The board decided on option 2, which uses $1,671,000 from reserves to balance the overall budget.
"The budget I am proposing this year is a balanced budget," Kleindl said. "It is a budget that is taking money from reserves, for one-time funding."
The board approved the proposed budget of $78,340,800, a $2.6 million increase over the approved 2020 budget. Most of the overall increase is from solid waste, as the plan is to open a new cell at the Kandiyohi County Landfill. Kleindl said that could cost around $2.1 million.
"We have slowly been building up some reserves for that," Kleindl said.
The budget increase also required a 1.16 percent increase of the property tax levy. The proposed levy, which was approved by the board in a 4-to-1 vote, would go up approximately $400,000.
Kleindl said the county has tried over the last decade to keep levy increases manageable by taking a long-term approach on budgeting and saving for upcoming large expenses such as landfill cells or building improvements.
"We take a three- to five-year approach," Kleindl said.
Commissioner Steve Ahmann was the lone vote against approving the levy.
"I feel very uncomfortable having an increase of the levy at this time," because of the ongoing financial uncertainty tied to the pandemic, Ahmann said.
He also said property values seem to be increasing, which would have an impact on the county's revenue.
"We are going to have more money than we thought we ever had," Ahmann said.
Kleindl said if the county decided to zero out the levy increase for next year and use more reserves, eventually it would need to make up that money, probably by increasing the 2022 levy even more.
"You need to make up those dollars at some point," Kleindl said.
Other commissioners said they would like to keep the levy at a 0 percent increase and that they too are concerned about the future, with questions surrounding whether the state will reduce county program aid or if taxpayers will be able to pay their property taxes on time.
However, the majority of the board voted to approve the levy increase and not to rely solely on cuts and reserve funds for any budget increases next year. The concern is that more difficult decisions will need to be made next year and beyond, when the current coronavirus stimulus and relief programs are no longer available.
"We are going to see more hardship next year than this year," said Commissioner Roger Imdieke.
The County Board won't approve the final tax levy until December. The commissioners can decide to decrease the proposed levy prior to their final vote but cannot increase it beyond the 1.16 percent they approved Tuesday.
"There are lot of fixed costs in our budget. I think we all agree this is a very low increase that we are looking at," said Commissioner Corky Berg.