Counties

expected

cuts in aid

Wages freezes, cuts in services, hikes in fees

anticipated

By KURT NESBITT

Journal Staff Writer

NEW ULM -- Few officials in area counties were surprised to learn about how the 2003 legislative session will affect county budgets and services in 2004.

Those changes will likely mean wage freezes for county employees, changes in county services, hikes in fees for those services and an increase in the amount of property taxes counties ask their residents to pay.

Many area county officials said the news of the Legislature's decision held good points and bad points. While aid cuts were passed along with reductions and eliminations in state grants, the cuts weren't as deep as the ones proposed by Gov. Tim Pawlenty. Also, a proposal that would allow for reverse referendums failed to pass in the Legislature.

County officials are now faced with the task of having to make do with less funding on two levels. Direct aid and state programs that fund county services were affected by the Legislature's efforts to bridge the $4.2 billion gap in the state's budget.

County administrators say the 2004 budgets will reflect both types of cuts. Preliminary budgets are expected by the end of this month. Most county boards won't see the specific budgets until August and draft budgets won't show up until September, when most counties set their tax levies. Final budgets won't be adopted until December.

One of the things that concerns Brown County Administrator Chuck Enter the most is balancing the county's 2004 budget with the state aid reductions, levy limits and cost shifts created by state mandates.

Nicollet County Administrator Robert Podrhasky said county officials will be faced with having to either continue services without state funding or cut those services entirely. He said that will be difficult for county officials to do because 85 percent of the services counties provide are required by state law, yet the state is taking away money while keeping the mandates in place.

That decision will affect each county differently, he said, and most commissioners aren't real keen on raising taxes.

"Cities and counties are left handling a large part of the state budget problem and that's very disappointing. We knew we were going to take a hit, but not to the extent that it happened," Podrhasky said.

Current estimates put the average county aid loss at 25 percent for 2003 and 42 percent for 2004. The average aid cut in the area will be about 20 percent.

Property tax levies are expected to climb as county governments try to recoup money lost in the aid cuts. Area counties could see property tax levy increases of an average of 3.3 percent in 2004.

Many area counties have already passed provisions and made budget cuts in anticipation of the news. Brown, Nicollet and Sibley counties have all instituted hiring freezes unless a position is considered essential by the various county boards.

One example: the Brown County Probation Department has already reorganized around $97,000 in cuts by reducing positions to part-time status and eliminating some of its programs that aren't needed to provide the core services required by law.

Here's another one: Podrhasky said Nicollet County voted not to give its employees cost-of-living increases last year in anticipation of huge aid cuts. He said the decision wasn't popular but was necessary, given the size of the county's payroll. Staff there also made 75 recommendations for the commissioners to review. Nicollet County is also implementing a departmental service fee study for those services not covered by the tax levy. Increases in fees are likely, Podrhasky said.

Sibley County Board Chairman Leo Bauer said his county has also made cuts in each department. Layoffs haven't started yet, but Bauer said they could come later. Sibley County has also increased fees for building permits, concealed-carry permit applications and is charging inmates to stay in its jail.

Said Bauer,"This is going to be a tough row to hoe, that's for sure."