Carver County administrator recommends preliminary 8% levy increase to cover cost shifts and capital needs

County Administrator Colin Hemsey and finance staff presented a preliminary 2026 budget recommendation to the Carver County Board proposing an 8 percent levy increase: 6 percent for base needs and a targeted 2 percent ‘‘surcharge’’ to cover identifiable state and federal cost shifts.
The administration said the county faces an unusually concentrated set of mandated cost increases in 2026 and beyond. The staff estimated a roughly $1.5 million immediate cost shift in 2026 tied to child‑protection and other state‑shifted items; staff cited another roughly $4 million in identifiable state and federal impacts in 2027–2028 under current law. Hemsey recommended the 2 percent surcharge for three years (2026–2028) to begin building levy capacity to pay those recurring costs rather than relying on one‑time reserves.
Major budget drivers listed by staff included: wages and benefits (collective‑bargaining settlements and health insurance), a 2026 payroll tax for paid family medical leave (included in the recommendation at an estimated $400,000), increased child‑protection costs previously covered by the state (the presentation noted a near‑term increase of roughly $910,000 in 2026), and a federal workload expansion (the presentation labeled it under recent federal legislation and estimated multi‑year increases tied to SNAP and related administration).
Staff also proposed continued funding for county licensed‑center operations despite year‑to‑date operating losses in the county’s licensed centers; the presentation noted a projected 2025 loss of about $190,000 for licensed centers and that the county expects continued upward pressure in 2026. Staff said they will continue to press the state for fee adjustments to offset county costs.
Capital plans were a major portion of the briefing. Facilities staff presented a master space plan that would demolish two older campus buildings, construct a new three‑story government center and renovate the existing county office building. The project estimate presented was $82 million with a projected annual principal and interest requirement of roughly $5.3 million. Hemsey recommended building $450,000 per year into the levy for five years to accumulate funds and replace retiring debt so the county can finance the project without an abrupt spike in the levy.
Staff outlined alternative options for the government‑center need: a limited renovation of existing space was estimated at roughly $16 million (deferred‑maintenance upgrades), a more extensive interior remodel at about $26 million, and an off‑site expansion option of roughly $20–30 million. Facilities staff warned that delaying a full replacement risks inflationary cost increases and raises the chance of mechanical failures in aging systems.
Hemsey presented a package of budget strategies including: targeted vacancy reductions and reorganizations, outsourcing where feasible (for example, some crisis services), voluntary furlough and voluntary four‑day work‑week policies, and a continued emphasis on capital‑improvement funding and maintenance. Staff recommended using a portion of the year‑end savings account for one‑time items and maintaining a reserve cushion.
Commissioners asked for additional detail and time to review. Several expressed concern about the size of the levy increase; others said the county should preserve services and invest in staff and facilities to support growth. The board did not take a final vote; staff will return with the preliminary levy for formal adoption at the next scheduled meeting and will hold the required public hearing under the tax‑levy timeline.