Preliminary budget shows $1.8M gap under new state property‑tax formula; commissioners told to consider cuts or exceptions

Susan Malene (McKesson and Martin Seichhorn, county budget contractor) presented the county’s preliminary budget calculations during an Aug. 18 work session, explaining how a new state property‑tax authority formula changes the county’s allowable property‑tax request.

Malene told commissioners the preliminary property‑tax request for the county was about $20 million (presented in the packet) and that, after applying allowable growth and a state‑provided inflation factor, the county’s authorized property‑tax authority was lower—leaving the county about $1.79 million over its allowable authority under the new calculation. Malene described two primary components used in the calculation: the growth percentage (reported as 1.15% for this year) and an inflation percentage set by the state (about 5.17 percent in the packet). She said the county’s preliminary budget increase equates to roughly a 16.7% overall increase compared with last year’s request based on current inputs.

Malene reviewed permissible exceptions that can be applied to increase authority—most commonly approved bonds for public safety or other exceptions such as county attorney/public defender costs funded in part by non‑property tax revenue—but warned that using such exceptions this year reduces the base used for next year’s calculations and can permanently reduce future allowable growth unless readded in later budgets. She noted the county’s cash balances declined in some funds (notably road fund and inheritance) and that transfers from the general fund to roads were a significant driver of increased budgeted disbursements.

Commissioners asked how large a cut would be required to avoid a joint public hearing or to remain within the cap; Malene said commissioners would need to cut roughly $1.8 million from the budget to stay within the new authority or else identify exceptions to apply. Commissioners discussed sinking funds, bonds and timing; Malene cautioned that large new bonds would increase levy requirements and could affect future calculations.

Commissioners asked staff to refine numbers, detail potential cuts and exceptions and return with options. The board directed staff to continue the budget process and to bring specific scenarios for the next meeting.