Despite state aid cuts stemming from the state's $4.2 billion budget shortfall, Clay County could balance its budget without raising taxes next year.
The county has run a surplus each of the last five years and has accumulated $3.37 million more in reserves than what the Association of Minnesota Counties recommends.
That cushion leaves the county with several options, including not freezing property taxes in 2004, raising taxes by up to 6.3 percent and applying the surplus to restore funding to hard-hit departments like social services, or a mix of both.
Commissioners Tuesday discussed the last option -- raising the tax levy by 2.64 percent and using $776,000 from reserves to cover revenue shortfalls and restore funding to several programs. A final vote is expected next month.
Clay County lost about $1.6 million in state aid in 2003 and 2004, in addition to state and federal grant reductions.
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In September, Clay County set its preliminary levy at $18 million, a $1 million increase, or 6.3 percent, from the previous year.
Since then, commissioners have been looking at ways to reduce spending and increase revenue.
Clay County departments trimmed budgets by about $1.8 million, the majority coming from social services.
But once commissioners learned the surplus was greater than recommended, they discussed restoring funding to a few key programs and taxing citizens less than previously planned."We needed to decide what we were comfortable with for a surplus," Chairman Jon Evert said after the meeting.
The plan commissioners looked at Tuesday allows the county to fund several programs previously on the chopping block, including $25,000 to Lakes and Prairies Community Action Partnership for a senior citizen program and $9,000 for a rural outreach program. Commissioners also restored $35,700 earmarked for children services.
"That's nice to have," said Dennis Lien, social services director. "Those are additional dollars we were not planning on, and it will be extremely beneficial."
Including state, federal and county reductions, Lien's budget will drop from $78.3 million this year to about $76.9 million in 2004.
Sheriff Bill Bergquist cut $124,850 from the jail and law enforcement budgets.
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Commissioners decided not to spend $44,000 on a master deputy program which gave qualifying deputies a one-time 3.5 percent increase for passing a written and physical test.
Other cuts include hours to part-time employees, clothing and fuel.
Bergquist said he eliminated $2,500 for bottled water in his office.
The Highway Department cut about $81,000 in its $6.8 million budget through reductions for road materials and maintenance.
To increase revenue, the commission raised two fees. Starting next year, day-careproviders will be charged a $50 licensing fee annually to defray the county costs of background checks. The county also wants to raise $7,000 annually in planning and zoning fees.
Currently, the county has about $12 million in reserves. Counties should have about half their total levy in reserve, which would be about $8.6 million for Clay County, according to the Association of Minnesota Counties.
The money is used to bankroll the county throughout the year. If officials draw down the county's reserves too far, the county risks running out of money.
Commissioner Kevin Campbell said he is comfortable the county will have enough in reserves, minus the $776,000.
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Lori Johnson, the county's auditor and treasurer, said the 2.64 percent tax levy hike would equal about a $37 tax decrease on a $100,000 home because of a larger tax base.
Commissioner Ben Brunsvold said he is happy with the progress.
"We actually got where I wanted to go," Brunsvold said.
Readers can reach Forum reporter Jeff Baird at (701) 241-5535
