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Supervisors discuss state budget changes that could cap levies, limit carryover
Summary
Board members reviewed an ISAC briefing about state budget changes: a 2% growth limit on valuations, separation of new construction, a 35% carryover cap and a hard general-fund levy cap that could fall to $3.50 by FY2030; members discussed implications and mitigation strategies.
Board members spent a substantial portion of the meeting discussing how recent state-level budget changes will affect county finances.
S5 summarized an ISAC overview, saying the bill applies a 2% growth limit for current valuations while separating new construction from that cap. S5 explained the state will no longer reimburse certain tax credits (homestead, military and business-property credits) and that the changes include a carryover limit of 35% for some funds. S5 warned that a planned hard cap for the general fund could reach $3.50 by fiscal year 2030, a level that may force counties to reduce services or shift costs to taxpayers if values do not increase sufficiently.
Board members raised several concerns: the potential need to commit funds to specific projects to avoid the carryover cap; the possibility of reallocating some rural-fund transfers to the general fund to relieve pressure on the general fund; and the difficulty of predicting revenue growth. S5 and others recommended closer departmental budgeting and consideration of strategies such as restricting funds for multi-year infrastructure projects to prevent carryover from counting toward the 35% limit.
Members urged contacting state legislators and noted that the final balance of the budget changes reflected compromises between competing bills during a short session. No formal action was taken at the meeting to change the county's budget strategy; staff were asked to provide additional written summaries and training materials from ISAC for board review.
The board noted the changes largely take effect in the next budgeting cycle and that the $3.50 cap would not be operative until fiscal year 2030, giving the county time to plan.
