Low turnout for county Truth in Taxation meeting

Cook County Commissioners held their Truth in Taxation meet­ing last Tuesday night, December 8, presenting a preliminary 2021 levy of $10,798,575, an increase of 4.16 percent over last year’s final levy of $10,367,293.

The lightly attended Zoom meeting was held in the commissioners’ room beginning at 6 p.m.

The levy can be lowered but can’t be set higher than 4.16 percent.

Because of COVID-19, the meeting was held via Zoom or, residents could follow the proceedings on their phone. Only nine people from the public listened or watched, with just one comment from a person inquiring about the county’s short-term rental policy, and he was directed to talk to County Assessor Bob Thompson, who agreed to meet or speak with him at a later time.

County Board Chair Myron Bursheim opened with an explanation of the intended legal purpose and rules governing the meet­ing. Auditor/Treasurer Braidy Powers followed him with a description of the budget and levy process and reviewed the proposed budget and levy.

Powers discussed some advantages and disadvan­tages of the local property tax system. Disadvantages include the tax system’s complexity, unfunded mandates, and collected tax revenue that may not be enough to pay the bills.

Advantages include local taxes being more responsive and account­able to the public and more stable for local govern­ments.

Powers listed the county taxing authorities: the hos­pital, school, and city. These taxes are also collected and distributed by the county.

While Powers pointed to the proposed levy increase of 4.16 percent over last year, which is higher than many would like to see, he noted that due to economic growth and classification changes to some property classes, including vacant land and vacation rental properties, there was a 5.1 percent increase in the overall tax base for 2021.

This means that for properties not affected by the classification or valua­tion change, there might be a very slight decrease in the county portion of the prop­erty tax statement.

Factoring into the budget formula are three situations the county board has followed closely, said Powers. One potential debt fall includes the county’s annual payment in lieu of taxes, which, based on a 2019 Federal appraisal of BWCA lands, resulted in a reduction of $752,000 per year. The federal govern­ment has agreed to per­form a reappraisal, which is expected to be done by the end of 2021.

A second potential problem is the state’s budget forecast deficit shortfall of 2.47 billion dollars. While the newest state financial forecast does not show a deficit, those state aid dollars on various forms make up 26 percent of total county revenues, and potential cuts could be sig­nificant.

Last, while property col­lections were substantial this year, and federal aid in the form of grants and loans and a strong tourist season helped individuals and businesses through the 2020 pandemic, federal loan repayment may start soon, and many forms of aid have ended. Powers said without federal assistance during the winter, it could be difficult for businesses and individuals to pay their taxes. The county board was monitoring the situa­tion, trying to weigh poten­tial impacts as it finalized the budget and levy.

Showing a pie chart, Powers pointed out where the public’s tax dollars are spent: 57 percent goes to the county, 15 percent to SGT and fiscal disparity, 10 percent to city, towns, and fire districts, nine percent to ISD 166, and nine per­cent to the hospital, EDA, and ARDC.

However, the audi­tor treasurer’s primary message was the effect of the change in classification of some properties that led to an overall increase in property valuation this year and to a reduced impact to homestead properties. Following the Minnesota Department of Revenue guidelines, the county assessor determined that many properties with a sea­sonal recreation classifica­tion better fit a residential non-homestead classifica­tion.

The new classifica­tion was put into effect for 2020 taxes and was the main reason for an overall increase in county valuation and a significant shift in taxes. That will change next year because the legislature approved a new property tax classification for short term rental property that will be 1.25 percent higher than the current residential rate. That bill was proposed by Cook County to clear up confusion over how to clas­sify short term rentals.