Budget 2023 Newsletter Article

Mille Lacs County Budget 2023

By Dillon Hayes, County Administrator

This article was featured in the Fall 2022 issue of the Mille Lacs County Newsletter. 

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 is an 11.5% increase over the 2022 levy.

The budgeting process started early this year, with individual departments reviewing historical revenue and expenditure data, and using that information to assemble their proposed budgets in June. 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 Board of Commissioners to review the proposed budgets and make adjustments before setting the preliminary property tax levy.

The increase being proposed for 2023 is a reflection of many variables that have, in one way or another, increased expenditures or decreased revenue. Some of the variables driving the increase in 2023 include:

    Deferred maintenance and repair of equipment and facilities. According to reports from the State Auditor’s Office, the average Minnesota county spent approximately 20% of their total budgeted expenditures on streets, highways, and other capital projects in 2021 and 2022. By comparison, Mille Lacs County spent less than half of that on those same items in an effort to lower property tax levies. This trend has not been limited to the last couple years, and the impact is starting to become apparent when evaluating the condition of County facilities. In order to safeguard taxpayer’s investment in these facilities, it is necessary to provide for repair and maintenance, before the wear and tear requires more significant investments. 

This isn’t just limited to traditional capital projects and County facilities; a similar trend is apparent in funding for Public Works. Last year, less than $0.02 of every dollar collected in property taxes was allocated to Public Works, which, unfortunately, has been the norm for the last few years. This has left limited funds available for the ongoing repair and maintenance of County roads. 

    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.

    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.

After adoption of the preliminary levy on September 27, 2022 the County Board of Commissioners and staff will continue working to reduce expenditures and explore alternative revenue streams in an effort to reduce the levy before certification at the end of the year. A public meeting to discuss the budget will be held on December 8, 2022 at 6:00 pm. The 2023 budget and levy will be finalized on December 20, 2022.

If you would like to provide input on the budget, review your proposed property tax increase, or review the budget and financial data, please visit the budget portal on the Mille Lacs County website: Budget 2023

Your input on the budget is extremely valuable for staff and Commissioners alike as they work to reduce the levy before December.