County sets 2026 preliminary levy at 2.5% to shore up highway fund and support capital needs

McLeod County commissioners adopted a preliminary 2026 tax levy increase of 2.5%, citing the need to restore the highway fund to the county’s fund balance policy and to address upcoming capital needs.

County finance staff presented levy options ranging from 1% to 3% increases; staff said the county plans to use unassigned fund balance in the general and social services funds and that wages and benefits account for about 46% of the county’s budgeted expenditures. The county is also budgeting capital spending including a major courthouse roof repair; the packet showed $5.9 million in capital projects.

Finance staff noted the Road and Bridge Fund had the lowest months of operating reserves at 4.26 months and that county policy requires a minimum of five months. Commissioners said maintaining roads provides strong taxpayer value and economic benefit, and several commissioners argued the highway fund required additional support to avoid deferred maintenance.

Commissioner Krueger moved to set the preliminary levy at a 2.5% increase; Commissioner Wright seconded. After brief discussion, the board approved the preliminary levy by voice vote. County staff will present final levy options in December; state law allows the final levy to be set at the same or a lower level than the preliminary levy.

Commissioners emphasized that the 2.5% figure was chosen to bolster the highway fund while preserving flexibility to revisit the levy at the final December setting.