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Battle lines drawn over taxes

One-time windfall could cut tax rate — or not

Staff writer

Battle lines as being drawn as county commissioners begin to debate whether to use a one-time reassessment windfall to cut taxes or increase spending.

At stake appears to be what to do with a consultant’s report preliminarily concluding that county employees are underpaid an average of four percent.

Assessed value of property in the county is expected to increase by close to $8.2 million this year.

If it weren’t for a state-imposed tax lid, the same property tax rate would generate considerably more revenue.

Because of the lid, however, the county will have to cut its general fund tax rate by a little more than 3 percent to keep overall spending under the lid.

Maintaining current tax rates would require voter approval — unless the county takes advantage of exceptions that tax accountant Scot Loyd seemed to take pains not to describe as loopholes when he itemized them for commissioners Friday.

One exception would be creation of a new budgetary item for storm contingency. Such a fund might be tapped not just in an emergency but also for more routine things like road repairs after the types of storms that tend to happen most years.

Although state law excludes from the tax lid money tucked away for emergencies, it does not evaluate whether what county actually uses the money to buy is an emergency expenditure, Loyd said.

“I’m just throwing that to you out front to think about if you’re forward-thinking and thinking outside the box and not so tied to what can we do to reduce the budget,” he told commissioners.

Commissioner Randy Dallke appeared to agree, but chairman Dianne Novak said: “We have the opportunity this year to reduce the mill levy. Perhaps reductions, where we can make them, would be incentives to grow the county.”

Citing examples from other counties, Loyd countered, saying of the tax rate: “It’d be beautiful to reduce it by three mills, but are we being forward-thinking?”

Novak shot back: “I don’t disagree with you, but it’s different when you have a county that’s stagnant and losing businesses. How are we going to bring in businesses when taxes are so high? What do we need to do to grow?”

Shifting an amount of revenue equivalent to what would be eliminated under the tax lid into a contingency or risk management item would be “a very reasonable way — not to take advantage, but to put it back in the budget,” Loyd said.

“I’m just throwing that to you out front to think about,” he said. “You have a lot of gravel roads, and you never know….”

However, Novak continued to focus on trimming spending.

“There is a lot of waste in each department,” she said.

But Loyd said meaningful change was unlikely by looking at spending on items other than payroll.

With 55 percent of the county’s spending going to personnel and another 35 percent spent on road and bridges and ambulances, less than 10 percent of the budget is consumed by items that could be impacted by belt-tightening with purchases, he said.

“If we analyzed all spending, I’ll bet you it would be no more than half a mill,” he said. “First question is, are you overstaffed or understaffed? There’s not a lot of extra fluff elsewhere. Two extra employees is a little more than half a mill.”

Novak wasn’t convinced.

“What I’m hearing is that we’re fortunate because we have this windfall — we’re fortunate and we have to spend it,” she said. “I’m not sure I like it.

“I’ve been thinking about an across-the-board cut, which happened in the past because the county was short and had to cut back. That’s not a bad idea. You just tell them, this is what you’ve got; make it work. There’s a lot of frivolous stuff they could cut out and still run reasonable services for the county.”

Although Loyd said most of the windfall was attributable to state-mandated reassessment of utilities and railroads, taxes on which would be passed along to citizens only indirectly, $3.6 million of the assessment windfall comes from real estate, with $4.6 million coming from pipelines, railroads, utilities, and the like.

Commissioners indicated they were uncertain what to do about the still-incomplete pay scale report, authors of which suggested that the county set aside money equivalent to two percent for pay scale adjustments and another two percent for cost-of-living increases.

“How many headaches does that cause?” Dallke asked.

County clerk Tina Spencer responded: “The plan doesn’t do any good if you don’t implement it.”

While uncertain about raises, commissioners did speak up for specific items they want in the budget for next year.

Novak favors trying to find money to continue reimbursing fire districts for the $400,000-a-year cost of leasing-to-purchase new radios.

Commissioner Kent Becker said he wanted to restore $100,000 budgeted last year to hire a county administrator.

That money ended up being diverted to a one-year subsidy for fire radios after voters rejected the idea of an administrator in a non-binding referendum.

Novak expressed surprise, noting that Becker had pushed for the referendum and asking whether he had changed his mind about the need for an administrator, who could be hired by the commission without a vote by citizens.

Becker, who had just joined the commission at the time, admitted he saw things differently now.

“I was very green and I’ve had a little more experience now,” he said.

At the conclusion of more than 2½ hours talking budget with Loyd, commissioners summed up their positions.

Novak: “My goal would be to reduce taxes. I don’t know when we would have another chance to do that. Go through each department budget and cut out the pork.”

Dallke: “I’m definitely not in favor of going that low because we’re not sure what’s going to happen with the tax lid. Put those excess dollars in the risk management fund. That’s the way this commission has operated for quite a few years to make sure we have money for a rainy day.”

Becker: “If we can look at efficiencies, I’m definitely in favor of that. We do have an opportunity this year. I’d like to see us continue to budget for an administrator.”

Development candidate coming

Before talking about the budget, commissioners heard from representatives of Marion County Community Economic Development Corp., which this week is bringing in a candidate for its long-vacant executive director position.

With Peabody and Marion withholding dues until the group answers questions, chairman Clint Seibel told commissioners: “We have to go forward on the basis of what the county can do, not on the basis of what the auxiliaries (cities) do. We look at this as a county venture. We just have to. That’s our security now.”

Last modified July 12, 2018

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