Mille Lacs County Budget 2023
Mille Lacs County is required to certify a preliminary property tax levy each September for the following year. The levy is based on the County’s estimated operating budget for the following year, and reflects the amount of property taxes needed to fund operations after accounting for other revenue and expenditures. In 2023, that amount is $23,227,857, which represents a 11.5% increase over the 2022 levy.
Levy Impact. The chart below shows how property tax dollars are allocated to each service area or department based on the approved preliminary levy for 2023.
The budgeting process started in May, with individual departments reviewing historical revenue and expenditure data, using that information to assemble their proposed budgets. These individual department budgets are reviewed with the Administrative Services Office and compiled to form the complete county-wide budget. Subsequently, staff meets with the County Administrator and County Board of Commissioners to review the proposed budgets and make adjustments before setting the preliminary property tax levy.
Preliminary Budget Reductions. Every year, the process between initial submittal of preliminary budget proposals and adoption of the preliminary budget and levy includes multiple rounds of review and reduction in order to seek a preliminary levy that is appropriate. The process in 2023 was no different, with an initial preliminary levy increase of 36.8%, before making reductions of more than $5 million to reach the approved 2023 preliminary levy. The largest levy reductions were from Community & Veterans Services and Public Works.
In evaluating proposed budgets and prospective cuts, County staff and elected officials reviewed a number of metrics to assess the allocation of financial resources. One of those was the budgeted levy by service area, before accounting for County Program Aid. This is a measure of how property tax dollars are allocated to each of the five major budget areas; General Government (which includes capital projects), Public Safety, Community and Veterans Services (CVS), Public Works, and Debt Service.
From 2005 to 2021 the County's property tax levy increased 39%; over that same time, the levy for Public Safety increased 130%. Over that same time frame, Public Safety expenditures increased at a 37% higher pace than all other County expenditures, on average.
Another item analyzed when evaluating budget proposals was key metrics, such as staffing, total property tax levy, and budgeted expenditures. For comparison purposes, data was compiled from comparable counties, neighboring counties, and counties statewide, depending on the metric being analyzed.
- Staffing: The County's full-time equivalent (FTE) employees per 1,000 citizens, is slightly lower than the average, with 9.3 budgeted FTE per 1,000 citizens in 2022, compared to Minnesota county average of 10.4 FTE per 1,000 citizens. Compared to neighboring counties, Mille Lacs County's total staffing was slightly above average, but considerably above average in the Sheriff's Office (36.4% above average) and the County Attorney's Office (62.9% above average). Staffing in all the remaining County departments was approximately 12.5% below the neighboring county average.
- Property Tax Levy: The County's levy per capita, or, total levied dollars per citizen, was $787 per person in 2022, compared to the Minnesota county average of $805 per person.
- Budgeted Expenditures: The County has consistently budgeted for more Public Safety expenditures than the state average, approximately 8.5% above the average Minnesota County in 2021 and 2022; in 2022 specifically, this was 8.6% higher than the county with the highest crime rate in Minnesota. In contrast, the County has continually budgeted less than average for capital projects, approximately 6.0% less than the average Minnesota County on street, highway, and all other capital projects in 2021 and 2022. The remaining eleven (11) expenditure categories included in the report were generally within a couple percent of the average in 2021 and 2022.
The increase being proposed for 2023 is a reflection of many variables; some of these items are unique to the 2023 budget cycle, while others have persisted (and may continue to persist) for years. Some of these variables include:
Depletion of fund balances. The County had been operating significantly below those fund balance guidelines established by the State Auditor’s Office. The County’s 2020 Financial Statement, prepared by the State Auditor, lists a total unrestricted general fund balance of $7,641 at the end of 2020, 0.11% of what the minimum fund balance should have been. The chart below depicts actual general fund balances in comparison to recommended fund balances from the State Auditor's Office.
The ongoing lawsuit with the Mille Lacs Band of Ojibwe. The Mille Lacs Band brought a suit against Mille Lacs County, County Sheriff, and County Attorney in regards to the revocation of the cooperative law enforcement agreement in 2016. In response, the County was forced to obtain outside counsel, spending over $8.3 million to-date on attorney’s fees.
Increasing costs of operations. Health care cost increases and a historically-tight labor market have necessitated regular increases to both wages and health care premium contributions. The increasing pace of inflation has pushed this issue to the forefront nationally and here at home, affecting budget line items from salaries and wages to fuel and supplies.
Increasing costs of out of home placement. In the last eight (8) years the cost of out of home placement, the court-ordered removal and placement of a child outside their parental home when it’s found that they’re in an unsafe environment, has nearly-doubled, from approximately $1.9 million in 2013, to $3.3 million in 2021. Approximately two-thirds of this cost is not reimbursed, and is therefore funded by the property tax levy. In 2021, out of home placement costs, after reimbursement, accounted for approximately 12% of the total property tax levy.