The Sherburne County Board Tuesday approved the preliminary 2018 tax levy in the amount of $46,483,457. That represents a 4.5% increase over the 2017 levy.

 

Administrator Steve Taylor said the levy has already been reduced from a 5.77% increase first presented during a workshop earlier this month.

 

Reductions were achieved by increasing the estimate of investment income from $900,000 to $1.1 million as staff further analyzed cash - flows for the building expansion project; reducing public works, maintenance and IT budgets totalling about $165,000 and getting reduced MCIT premiums for property & casualty and worker's compensation totaling about $201,000.

 

Taylor said the county is estimating a 6.75% tax capacity growth in 2018. 

 

“It’s a direct indicator of a healthy and growing economy,” he said. “We’re seeing nearly 20% in residential permit growth over past two years and also seeing a 6.7% residential property value growth.”

 

The biggest reason for the levy increase is tied to salary and benefits - about $1.2 million,  said Taylor, plus additional operating costs for the building expansion project.

 

Taylor said in talking with officials from other counties, many are increasing their levy to match their tax capacity growth.

 

“Staff is not recommending this to the Sherburne County Board,” he said. 

 

The county currently has the 13th lowest tax per capita in the state. 

 

The preliminary levy can be reduced but not increased. Taylor said one thing to watch for will be County Program Aid (CPA), which counties receive from the state. Sherburne County is expected to receive about $360,000 in 2018. But a state budget shortfall might mean cuts to that amount.

 

“CPA has a big target on it,” he said. “The anticipation is we’ll see that reduced in 2018. So we could be reducing the budget more.”

 

The board also approved the Regional Rail Authority levy in the amount of $1,409,995 - a 3.4% reduction from 2017.

 

“We’re seeing lower than expected operational costs for NorthStar,” said Taylor.

 

The net impact with both levies combined is about a 4.25% increase, which translates to about a $52 annual increase for an average home in the county.

 

He said the effective tax rate will continue to drop as is has for the past three years.

 

“If property values did not increase, there actually would have been a reduction in taxes for the average value home in Sherburne County,” he said.

 

“It’s nice to see us in a position where we are having some growth and can actually lower our effective tax rate,” said Commissioner Felix Schmiesing. “We’re in a much easier position than when we had home values declining, we were reducing the levy and the effective tax rate was increasing. People were seeing their values go down and their taxes go up. That’s a worst case scenario. We don’t want to go through that again.”

 

Approval of the final levy is slated for Dec. 12.