Unpacking the county levy, up 3.99%

 

December 22, 2023



More people phoned Carlton County to complain about tax increases than attended the Dec. 12 Truth in Taxation hearing.

More than 30 people called the county to deliver messages about “unsustainable” increases, or to say, “you’re taxing us out of our home,” said auditor/treasurer Kevin DeVriendt.

Only about a half-dozen people spoke briefly during the hearing, and only one rose to the dais to plead his case.

“This is the kind of increase that’s not treating our elderly population with respect or dignity,” said Jim Kuklis, who owns Trails Edge subdivision in Cloquet, where he rents units to senior citizens. He recited a message he also delivered to the city of Cloquet earlier this month, saying he’s forced to pass along property tax increases to elderly renters.

Overall, the county board is considering a $33.5 million tax levy for 2024 on a $79.6 million overall budget. The proposed levy is 3.99 percent higher than last year’s $32.2 million.

“We heard you, we really have, and we understand the problem,” board chair Dick Brenner said. “We have tried as best we can on keeping the taxes down.”

The final budget needs to be passed during the 4 p.m. Dec. 26 county board meeting.

Commissioners can approve a lower increase, but cannot go higher than the proposed 3.99 percent. New information, including the results of ongoing contract negotiations with unions, can change final numbers.

Regarding the proposed levy, the board tapped into its fund balance for $400,000 to get below a 4-percent increase. But that’s not something the board can do forever, commissioners said. Instead, they’ve been lobbying the state to help reduce the number of unfunded mandates — programs the state requires counties to both implement and fund. Between 60- and 85 percent, in any given year, of county expenditures are used to deliver services required by the state, DeVriendt said.

When those programs are unfunded, it puts a burden on the county, commissioners said. Commissioners Brenner and Gary Peterson addressed one such program aimed at disabled veterans. Depending on their level of disability, veterans are able get property valuations reduced — some as much as 100 percent. Because the county has a high number of disabled veterans per capita owning property, the program has resulted in tens of millions of dollars’ worth of property being taken off of tax rolls, they said.

“We’re not anti-veteran,” Brenner said, calling it a “great benefit for veterans.”

But as a result of the program, the county took a roughly $2 million hit in tax collections, he added, and it’s money the state does not reimburse.

“Everybody else has to pick up the difference,” Peterson said, reiterating, “we’re not anti-veteran.”

The state surplus of $17.5 billion resulted in county program aid, the money received from the state, rising 32 percent in 2024 to $3.1 million. It was the sort of dramatic jump not seen in many years.

“This is a huge positive and a win,” DeVriendt said, while also calling it a “scary” increase because there are no guarantees the same amount will come again in subsequent years.

Commissioners and DeVriendt urged property owners to investigate property tax refunds, and for renters to access rental rebates. Of 12,000 households in the county, about 5,300 are eligible for property tax refunds, DeVriendt said, adding that only 69 percent of homeowners apply. The average return is $1,028, he said, but about 1,700 eligible households are not applying.

“If you don’t apply, the state just keeps it,” Peterson said. “They make you jump through the hoops on it.”

Peterson also encouraged rural landowners to investigate the Sustainable Forest Incentive Act, which the state describes as providing “annual incentive payments to encourage private landowners to keep their wooded areas undeveloped.”

The reimbursement, worth thousands of dollars, “covers most of my taxes,” Peterson said.

“I couldn’t own the land if I didn’t have that program,” he added.

The biggest increases in the levy are coming from the sheriff’s office — its budget making up 1.75 percent of the 3.99 percent overall increase — and county jail (1.58 percent). Most of those increases are related to adding staff.

“Additional positions and changes exceed $1 million,” DeVriendt said, referring to personnel additions and job category elevations for current staffers.

“A lot of it may be shocking,” DeVriendt said of staffing increases. “But there are a lot of changes going on in the county,” including bringing online the new jail and courthouse, along County Road 61, later in 2024.

A whopping 433 percent increase in investment income allowed the county to reduce its auditor’s office budget almost entirely, resulting in a $619,718 change for 2024, or 1.93 percent shaved from the total levy. The county credits investment income to one account, the auditor’s budget, rather than distributing it throughout all funds, DeVriendt explained to the Pine Knot. Thus, last year’s auditor’s budget of $634,862 is a mere $15,144 in 2024 thanks to investment income.

DeVriendt noted that between other taxing jurisdictions, the county has more than 70 combinations of tax bills, depending on where people live and which schools or fire and ambulance services they’re served by.

Some of the most notable proposals included bills for those living in Cromwell-Wright and Barnum school districts, which called for 60.8-percent and 51-percent levy increases, respectively.

Cromwell-Wright’s rose based on voters passing a referendum earlier this year to refurbish the school. It was unclear why Barnum’s taxes were up so sharply. (The Pine Knot plans to look into this for a future story.)

“You can make your own conclusions,” DeVriendt said, “but most of the calls we got were from the Barnum area and Cromwell.”

 
 

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