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BACKUS - Cass County will have to operate on $218,000 fewer dollars in 2011 than 2010 if the county board continues to pursue board members' stated intent to keep the same property tax levy rate next year as 2010 and 2009.

It would take a 3.1 percent levy increase to generate the same number of dollars in 2011 as 2010, according to Chief Financial Officer Larry Wolfe.

The board conducted a special meeting Tuesday with the five appointed citizen budget committee members, who this summer will prepare a proposed 2011 county budget before the county board adopts a levy in September.

Total dollars the property tax generates result from multiplying the levy by the county's total property market value. Assessor Mark Peterson reported, after years of increasing, the county's total market value has dropped 5.2 percent in the last year.

Additionally, new construction completed in the county, which used to help increase the county's overall value, has declined from $88,465,000 in 2008 to only $44,000,000 in this years property valuations. This means new construction no longer offsets level or declining values on existing property.

Several years ago, the Legislature decided property taxpayers should not have to have the full value of their property used to compute taxes if their property value increased more than 10 percent in one year (exclusive of any new construction). Then, the Legislature gradually phased out over the last decade that differential until, finally this year, taxpayers will pay based on the full value of their property rather than the former "limited market value."

This meant that in 2010, the county's taxable value increased slightly, though the total market value had decreased slightly, and more tax revenue was generated for the 2010 budget than that of 2009 on the same levy value. This will not happen for the 2011 budget.

Cass County has cut 26.15 employees since 2008, 12 of which were layoffs, and now has about 248 employees. Employees who were not at the top of the 10-year wage scale received about a 3 percent step increase in 2010, but were asked to take off 64 hours unpaid time to offset another overall 3 percent cost of living wage increase in 2010.

New union wage contracts will be negotiated before 2011. Board members have indicated they will be looking for zero cost of living pay increases in new contracts.

The county board and elected officials have retained the same wages and per diems in 2009 and 2010 as they were paid in 2008.

In 2010, 40.5 percent of Cass County's budget came from property and other taxes, 15.7 percent from fees and charges, 12.7 percent from federal grants, 18.5 percent from state grants, 10.8 percent from miscellaneous revenue and 1.8 percent from interest earned on investments.

Spending this year will go 28.1 percent to health and human services, 23.2 percent to highways and streets, 20.3 percent to general government, 16.4 percent to public safety, 5.8 percent to conservation, 4.9 percent to sanitation and 1.3 percent to miscellaneous.

While Cass lost only about $400,000 state program aids and market value credits in 2010 under the 2010 final state legislative budget, Wolfe warned that, if the state is short of cash when it comes time to pay counties this month, in October or in December, the state Office of Management and Budget has authority to defer up to $987,127 more in payments to Cass this year.

The legislature could cancel those deferred 2010 payments next year, he said.

As the Legislature faces a $5.766 billion or 10 percent shortfall on its budget next year, Wolfe said Cass likely will lose all its state local governments aids.

Only about one-third of Cass County's total 1,525,200 acres are taxable land. Another 53.8 percent or 820,500 acres are tax exempt, with the majority being state, county managed and federal forest lands. The remaining 200,000 acres are water.

Cass has received payments in lieu of taxes from the state on 445,000 acres of state forests and state-deeded lands the county manages. Wolfe said state legislators who live in the Twin Cities have talked of cutting those payments, because their constituents are ineligible for that funding.

This would have a significant impact on Cass's budget revenue, he said. He and Administrator Robert Yochum also cited the Legislature's ongoing gradual cuts from state support for some mandated programs in social services and such as the 25 percent drop this year in support for the jail inmate sentence to service program.

Commissioners Jim Demgen and Dick Downham and citizen representatives Earl North, Lake Shore; Gary Gould, Pequot Lakes; Dan Meier, Hackensack; Jim Lohr, Walker; and Rick Baird, Cass Lake, are the budget committee voting members.

Yochum, Wolfe, Auditor-Treasurer Sharon Anderson, Chief Deputy Treasurer Karen Flier and Assessor Mark Peterson comprise the non-voting staff budget committee membership.[[In-content Ad]]

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