Sherburne County staff outline state budget shifts, legislative changes and three levy scenarios for 2026

County staff briefed commissioners on the fiscal and policy impacts of the recently completed state legislative session and sketched three budget scenarios for the 2026 levy.

Bruce (legislative/budget lead) told the board that some state actions reduced earlier, larger cost‑shift risks but that county exposure remains. He summarized the most important items: the local government cannabis aid was eliminated (county staff had expected registration aid and had negotiated joint powers agreements with cities and townships); community‑corrections subsidy formula changes were smoothed to a three‑year transition; and the disability‑waiver shift remains a risk pending a state study commission that must find $175,000,000 in savings. Bruce said those unresolved “TBD” items could add materially to county costs and suggested building budget scenarios that reflect uncertainty.

Staff presented three scenarios for the 2026 levy framing: a status‑quo or base budget (roughly a 6% levy change in staff estimates after ARPA and other one‑time items are removed), a middle scenario that absorbs current known state shifts (approximately a 6% total levy impact under staff modeling), and a more austere scenario aimed at a 3% levy increase that would require program and staffing adjustments to absorb about 2% of state cost shifts within the 3% target. Commissioners discussed tradeoffs among service levels, staffing and sustainability across two fiscal years and asked staff to return with department‑level plans showing how those scenarios would be implemented.

Bruce and staff identified a number of specific impacts and numeric placeholders: the immediate, consolidated risk from recent legislative changes was estimated at about $550,000 to the county (staff said this figure could grow if pending items resolve against counties); a pending rule change around assessments and the move to a flat fee for MNChoices assessments could reduce county reimbursement compared with the current random moment time study (staff said county costs per assessment would require roughly $770 to be revenue‑neutral by their estimates, but the state flat fee is unknown); and the Minnesota African American family preservation and child‑welfare disproportionality law will require ramping staff (staff estimated about 8.5 FTEs and roughly $500,000 to be in place to comply by the law’s effective date of Jan. 1, 2027). Commissioners asked staff to model the second‑year impacts and to show one‑time versus recurring revenue/timing differences before the July workshops.

Commissioners also raised policy and political options, including using reserves, seeking legislative relief and communicating levy drivers to residents. Commissioner Schumacher and others emphasized the county’s reputation for delivering services and urged staff to seek creative operational efficiencies. There was no formal action; staff will return with scenario budgets and department analyses at July workshops.