Editor's Note: Dakota County Commissioner Tom Egan represents Mendota Heights, Lilydale, Mendota and a portion of Eagan. He was elected to office in 2004 and is now serving his second four-year term. Egan will write regularly to Patch readers about county government. Now that the state budget has been resolved, commissioners are reviewing how the county's budget will be impacted.
With a genuine sense of relief, the Dakota County Board of Commissioners gratefully looked this past week at the Minnesota state government shutdown through the rearview mirror. What remained to be done was a study of the impacts of the 2011 legislative session on Dakota County.
To that end, the county board just completed a preliminary legislative wrap-up.
Among those things we reviewed during our legislative wrap-up was the state’s adopted budget for fiscal years (biennium) 2012-2013, with the estimated fiscal impacts on Dakota County compared to the current year forecast.
Resulting from changes occurring during this session, we estimate that we will lose $2.4 million in County Program Aid (the county's equivalent to Local Government Aid) in State Fiscal Year 2012 and a similar annual amount on an ongoing basis into the foreseeable future.
Additionally, Dakota County will lose $3.3 million in what is known as Market Value Homestead Credit (MVHC). MVHC is a "credit" which shows up on a property owner's tax statement, which by state law the county is required to give to a property owner based upon the property's valuation.
Theoretically, the state is required to reimburse the county for this credit which we make to the property owner. Over the years, the state has been very inconsistent in their reimbursement for this credit.
When the state doesn't reimburse the county—after we have certified our levy—we must find a way to cover that lost revenue since we have already credited the property owner.
This year we know we will not receive $3.3 million in previously promised Market Value Homestead Credit. The Legislature in their models "assume" that local units of government ... such as Dakota County ... will only levy back in 2012 50 percent of this amount.
What that means for the Legislature's purposes is that it does not show up as a full dollar-for-dollar shift from income taxes to local property taxes.
All in all, the estimated total loss to Dakota County for state fiscal year 2012 /calendar year 2011 is $7.9 million and an estimated ongoing annual loss into the foreseeable future of $4.3 million. The direct impact to Dakota County residents/taxpayers this year, which cannot be made up simply by adjustments, is $5.8 million.
Fortunately, Dakota County in its budgeting process for this year proactively anticipated cuts similar to those shown above and we were braced for this impact, making adjustments that matched quite closely these cuts.
However, we believe this is a terribly improper way for Dakota County to be forced to budget or plan programming for the year. The state, once again, has proven to be less than a dependable financial partner.