Tax levy

The McLeod County Board unanimously approved a 2021 preliminary levy increase of 5 percent at its Sept. 15 meeting. If the proposal is finalized in December, the total levy will be $25.77 million, up from $24.54 million.

The preliminary levy is nearly sufficient for the county's budget to "break even" and to use no money from the county's fund balance.

"Utilizing fund balance at this stage, in my opinion, I feel is not wise," said Board Member Paul Wright, who made the motion to approve the preliminary levy.

"It gets us close to a balanced budget," said Board Vice Chair Doug Krueger, who seconded the motion. "I'm skeptical of what is going on right now with COVID. I just don't want to get into fund balances, we might very well need them in 2021, maybe 2022. I think there is going to be repercussions."

The County Board will approve the final levy in December. At that time it can decrease the levy, but not increase it.

IMPACT ON TAXPAYERS

Data reviewed by the County Board differs slightly from that usually reviewed each September in that it included how an estimated increase of 9 percent to property values would impact taxpayers. Taking into account that 9 percent and adding on the preliminary 5 percent levy increase would raise the taxes on a residential home valued at $400,000 by $223. This data only reflects the county's portion of property taxes.

Colleen Robeck, the county's finance director, said the property value increase had a larger effect on taxes than the levy would.

Among the expenses that would be covered with the proposed increase are about $1.1 million in the general fund that would otherwise be paid for with the county's fund balance. The administrative budget is set to decrease by $315,000 due to low interest rates, while the information systems budget is set to increase $181,577 due to server and technology infrastructure upgrades and maintenance. Another $100,000 is in the 2021 budget for repairs at the McLeod County Fairgrounds. Other costs distributed among departments are due to salaries and benefits.

Robeck noted $3.4 million set to be used for road and bridge work will come from the fund balance, but those funds were placed there from previous bonding.

LOOKING BACK

A review of McLeod County taxes over the past 10 years shows a 2011 levy decrease of 2.93 percent followed by four years with no change. That ended in 2016 with an increase of 2.73 percent, followed by a 5 percent increase in 2017, a 7.1 percent increase in 2018 and an 8.5 percent increase last year.

"If we would have just done an average levy increase each year, instead of having a negative and holding it at zero, it would have been a 2.74 percent levy increase," Robeck said. "That's kind of the trend. If you don't increase the levy it's going to catch up with you at some point."

"I definitely do not want to handicap future boards like we have been," Wright said. "But we still have to try and find an amount that is reasonable. ... One thing we really need to get to some day is stability in these increases so that it's not a roller coaster ride. And the only way to get there is to see what truthful numbers are today, realizing that using fund balance, we'd pay for it someday down the road."

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