There was a nice turnout for the annual Truth in Taxation meeting held Thursday, November 29 in the commissioners’ room at the Cook County courthouse, and although the room wasn’t as packed as it has been in recent years, quite a few people were on hand to ask questions and to listen to the presentation.
To start the proceedings Cook County Auditor/Treasurer Braidy Powers went over the proposed property tax levy for the taxes payable in 2019, and for the proposed budget for the taxes payable in 2019.
As the levy sits now, if passed, it would be a 5.9 increase over 2018.
From 2015 to the proposed 2019 levy there has been an increase from $6,516,848 to a projected $9,790,211.
Cook County Administrator Jeff Cadwell presented a brief history of the levy starting in 1989 to the present. Since 1989 levy increases have varied widely, with a range of -12 percent to plus 25 percent and a 29-year average of 4.6 percent, said Cadwell.
“With an average levy increase of 4.4 percent over the same period, the county would have collected an additional $29 million in local revenue and would not be in the position of bonding for capital improvements,” noted Cadwell.
And, he said, “With an average levy increase of 4 percent over the same period, the tax levy would be one million dollars lower today, and the county still would have collected an additional $17 million in local revenue.”
Cadwell said that before 2016 previous county boards used the fund balance, deferred spending and maintenance and capital planning to mitigate the increase in levy dollars.
In 2015 the county spent $842,311 from the fund balance. “Since then, the county has not budgeted the use of fund balance to balance the budget,” he said.
Statewide the 2018 average county levy was 4.5 percent, but Cadwell said many counties dipped into their fund balances to keep their levies below 5 percent. If you take the $160 million spent from Minnesota counties fund balances in 2018, those dollars represent a discount of 5 percent to the statewide levy increase, which would put the average levy at 9.5 percent in 2018.
Next Cadwell tackled the misconception about the county taxes as being high. The average local county tax rate in the AMC District 1 (Northeast Region) is 62 percent, said Cadwell, while Cook County’s proposed 2019 tax rate is 60.99 percent.
And while the Minnesota Center for Fiscal Excellence in January 2018 said Cook County had the highest Traditional Price of Local Government at 7.3 percent, with the median at 4.3 percent, there was more to it.
If you read to the end of the report, said the county administrator, “In the same report Cook County is noted as having a much lower price of local government when filtering only or locally paid property tax of 3.3 percent with the median at 3.15 percent.”
Sometimes it has been said that people are being taxed out of their homes, a point Cadwell argued, “Property taxes, on average, are 2 percent of median family expenses in Cook County. So a 5.99 percent increase is effectively a .012 percent increase in family expenses.
“The average county homestead tax bill is approximately $1,300. What else can you get for $110 per month?
“What you get for $110 per month in county services,” said Cadwell, is “Public Safety, 32 percent; Transportation, 24 percent; Public Health and Human Services, 28 percent and other governmental functions, 16 percent.”
Next, changes to the 2018-2019 budget were discussed. Included was adding a part-time Community Center program assistant, adjusting hours to existing positions in the Sheriff ’s Office and Public Health and Human Resources as well as adding a new MIS technician during the third quarter of 2019.
Proposed additional capital funds of $100,000 are targeted to be used for general building maintenance, $60,000 for sheriff ’s equipment reserves and $43,000 for current and future capital needs at the YMCA.
Also, Cadwell said based on the auditor’s recommendation the TCA budget was removed from the levy summary and placed on a separate line item (536) with the general fund.
Discretionary grants were divided into two categories.
Public Health Grants were moved to the Public Health and Human Services budget and are reviewed and approved by a subcommittee of the PHHS Advisory Committee with the 2019 allocation for community services $130,000.
Arts and Culture grants received $15,200 and will still be reflected in the general fund.
Last the classification and compensation study was discussed. A new three-year employment contract includes a uniform classification system for all county employees. Eight pay scales were combined into one single pay scale, and the new deals include a 20 percent cost share for employees on the health insurance plan.
Questions by the public
With explanations finished and the process for the levy outlined, it was time for questions.
First up was a gentleman who said his 24-year-old daughter had purchased a house in the county and her taxes went up 114 percent in 2018. “Is that even legal?” he asked.
Because she works three jobs she makes just enough, so she doesn’t qualify for any assistance from the state, he said.
Next Stacy Hawkins, Grand Marais, said the county paid $28,000 for a study that suggested the county should keep its levy between 4 and 5 percent per year. At that rate, in 8 years residents will see a 70 percent increase in their levy. “Our residents cannot sustain that tax increase,” said Hawkins.
Using numbers he got from the state, Tom Crosby said Cook County’s median household income is $51,793, and the median price for houses is $242,000.
“Our property values have gone up quite a bit,” said Crosby. “It doesn’t make it easy on the young and old, especially those on a fixed income.”
Using the Rule of 70, Crosby said that in 14 years his property taxes would go from $1,500 to $3,000, and in 28 years rise to $6,000 under the current rates.
So, said Crosby, with a median income of $51,793 today I would have to make $207,72 for me to keep the same quality for my life.
“I came here today to plead with you to take a look at your budgets. Take a hard look at your services and determine what the public can pay for.”
Noting that he gets about a 3 percent raise each year, Steve Watson, Maple Hill, said last year’s 17.9 percent tax levy, “Took four years of raises away from me.”
Among his comments, Watson said, “The easiest money you spend is the money you don’t earn. We expect you to spend it wisely.”
Steve Wonderous drove six hours one way from River Falls to make a 30-second statement. “I am an outsider here, but I’m the guy you don’t want to see.” He said his family had two lots on Greenwood Lake, one going up 86.6 percent and the other lot rising 51.3 percent over last year.
“I just hope everyone’s taxes on the lake went up that much.”
Barb Heidemann, Gunflint Trail, was there to defend the county board’s 2019 proposed budget. “Reasonable people can agree to disagree on taxes,” she said. “I think you are doing a good job of keeping us ahead for the future.”
After preparing for three days, Lloyd Speck wasn’t nearly done with his information when his five minutes were up. His comments to the county board are in the “As I See It” column this week.
Rae Piepho of Lutsen was up next, and she made a case that Lloyd Speck should have been given more time because of all of the time he took to prepare for the meeting. Piepho asked how much paid time off (vacation, sick leave, holidays) county workers get at various stages of their careers, and administrator Cadwell said he couldn’t remember.
Next, she asked about the Payment in Lieu of Taxes (PILT) the county received in June (or May, said Powers).
“We’re still waiting,” to find out from the government where the $761,000 will go, said Powers. He described three different places the money might be directed, two of those to the school, but until he knew for sure, “I don’t want to be guessing and give the money to the school and then have to ask them to give it back.”
Tod Sylvester, Grand Marais, was the last person to speak. He said a lot of people that had shown up the previous three years, “didn’t show up today because they believe this is nothing more than a formality.
“I told you last year that I was disabled and I couldn’t afford the taxes. You listened with empty ears and empty hearts.”
Sylvester said he has had 10 major surgeries in recent years, all the while trying to work on his house when he is physically able to.
The county has assessed his unfinished house at $400,000, he said, a price he couldn’t get for it on the open market, he was told by a local Realtor.
With the increase in valuation, his taxes on his house have now gone up to $376 per month, “How will I afford that on my disability?” he asked.
He looked at administrator Cadwell and said, “You said no one was getting taxed out of their house. I am being taxed out of my house, the house will be on the market in a couple of months.”
Administrator Cadwell responded, “I’m sorry.”
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