For the second year in a row, Crow Wing County commissioners approved a property tax levy increase nearing 7% over the previous year.
At an evening meeting Wednesday, Dec. 11, the county board agreed to tax its residents for an additional $2,554,186 compared to taxes collected in 2019, or a 6.95% increase. This follows a 6.99% increase for 2019, approved after eight consecutive years of levy reductions totaling 5.26%.
County Administrator Tim Houle began the presentation by pointing to what county officials say is the primary reason for these two years of levy increases — a substantial methamphetamine abuse problem in Crow Wing County. Houle said the problem touches many aspects of county government, including the county attorney’s office, the sheriff’s office and community services. One area most directly impacting the levy is out-of-home placements of children, the budget for which has nearly tripled since 2013. Out-of-home placements occur when children are temporarily or permanently removed from the home, either due to actions of the parents or child. Meth use is a common driving factor for community services taking this step.
“This is where it really gets to be very, very costly to us, because this is 100% county levy,” Houle said. “ … That’s an awfully rapid rate of increase that’s very difficult for an organization to absorb that quickly.”
Houle said in addition to reacting to social maladies in the community, increasing the levy will also bolster fund balances in an effort to return them to recommended levels. Many of the dollars spent from those funds have also gone toward reacting to the meth problem and its impacts. For the 2018 budget — the last year the board approved a reduced property tax levy — the county began to use money from its fund balances for ongoing expenses for the first time.
Following Houle’s introduction, Crow Wing County Finance Director Nick Mielke shared more specific details on the county budget and levy.
How this increase in the levy affects individual property owners depends on the value of their properties and changes occurring to those values. For example, assuming no changes to value occurred between 2019 and 2020, the county portion of taxes levied on a residential homestead property in Brainerd valued at $101,200 would increase by $4, from $324 to $328. If a property increased in value by 3.73% — the average change in value — that increase jumps fourfold to $16.
Other property types would generally see higher increases. A seasonal recreational property in Crosslake at the average market value of $376,500 would see a tax increase of $13 with no value change — from $1,231 to $1,244 — or an increase of $60 with the average change in value. An owner of a commercial industrial property in Baxter with an average market value of $1.06 million would pay $6,780 rather than $6,705, an increase of $75. If that property were to increase in value by 3.73%, county property taxes would increase by $337.
The property tax levy accounts for 42% of total expected revenues for the county in 2020. The county also earns revenue from other governmental sources, such as state and federal grants, charges for services, licenses and permits, investments, special assessments and a few other, smaller sources. Of the 42% covered by local property taxes, the largest portion goes toward community services, or 34%. Public safety isn’t far behind, accounting for 26% of the levy dollars. These two areas are also those most impacted by methamphetamine use among area residents.
One notable change coming in 2020 involves the county’s debt. Next year, the county will make its last payment toward debt it acquired in building new county facilities in 2007. These facilities include the county jail, community services and the judicial center. The 2020 property tax levy is the first one since that debt load was incurred that doesn’t ask taxpayers to cover those costs. The county will be nearly debt-free, with just a small portion remaining due on general obligation airport bonds and the public works facility in Crosslake.
No residents spoke during the public hearing portion of Wednesday’s meeting. Three people in the audience indicated they wanted to speak with land services about concerns with the valuation of their properties, and left the county board room with Land Services Director Gary Griffin to discuss those concerns further.
Commissioners approved the 2020 budget and levy unanimously.
Also approved as part of that resolution was the levy for the First and Second assessment districts, for which the county board serves as the township board. The 2020 levy in the First Assessment District will be $978,022, an increase of $85,882, or 9.6%, over 2019. The First Assessment District, an unorganized territory, includes the area north of Baxter and Brainerd, east to Merrifield, extending northward to the Nisswa city limits. It represents the third-largest population center in the county.
The Second Assessment District levy will be $67,812, an increase of $172 over the previous year.
Levies for the Crow Wing County Housing and Residential Authority, the Region Five Development Commission, the Cuyuna Range Hospital District and the Kitchigami Regional Library System were also approved.