Dakota County has long prided itself on maintaining the lowest property tax rate of the 87 counties in Minnesota. That's likely to hold true again next year, despite a projected $10 million budget gap that county officials say will have to be made up, in part, through layoffs and delays on construction projects.
The board of county commissioners approved on Tuesday a modest increase to the county tax levy that won't change tax bills but will require a host of budget cuts. At the same meeting, though, the board approved merit-pay raises for about 500 nonunion workers, including information technology specialists, finance workers and communications employees, among others.
Elected officials and appointed officials are in a separate category entirely — "unclassified employees" — and no decision has been made yet as to whether the raises would apply to them as well.
"The board did not give themselves a pay increase," said Thomas Egan, who chairs the county board.
With some variation, the raises will be equivalent to about 1 percent of a nonunion employee's salary. They're officially labeled as merit-pay increases, but most nonunion employees will receive them.
"We expect the vast majority of employees performing satisfactorily to qualify for it," said county financial services director Matt Smith, in an interview.
Gail Plewacki, a spokeswoman for the county, said county wages have been frozen for both union and nonunion employees for the past
year, and twice as long for the seven-member board of county commissioners.
"We've been in a wage freeze. This is new," she said. "Nobody got any wage increases for 2010, and they will not. The board froze their own wages for 2009 and again for 2010."
Plewacki said the 1 percent merit increases will be covered by rolling nonunion employees into a new HealthPartners health plan with a $500 individual deductible and co-insurance, allowing the county to save money on premiums. County employees previously paid flat co-pays without deductibles.
County Administrator Brandt Richardson said the county does not use "step" increases, but instead relies on merit increases to increase pay with time.
"It's not tenure-based, it's merit-based," he said. He called a 1 percent increase "very modest" in comparison with previous years.
"We are asking employees to bear a change in the health care plan at the same time. It's very hard to accomplish that, and not hold them even in some manner," Richardson said.
Plewacki said the county has avoided layoffs to date, but eliminated more than 100 vacant positions in the past two years while freezing hiring. The county has 16 labor units, and each is still negotiating its own contract for 2011.
County officials have made no public statements as to what departments would be hardest hit by the likely layoffs, as the budget is still being drafted and state aid is uncertain.
"We're trying to make a reasonable, but not punitive, estimate of the reduction (in state aid) we might bear," Richardson said.
At Tuesday's meeting, commissioner Willis Branning said the county — which is one of the county's larger employers — has a responsibility to taxpayers but a responsibility to its employees, too. With about 1,750 workers, there's a large overlap between the two groups.
"I, for one, do not want to see layoffs," Branning said. "I've experienced that, and it's not easy to let people and their families know there is no longer an employee in that family."
Based on Tuesday's actions, the bottom line for taxpayers will be a wash. Because of declining property values, a median-value home will experience a drop of $2.58 on the county levy portion of property taxes next year. That decrease will be almost entirely offset by increases to the Regional Railroad Authority levy.
On Tuesday, commissioners decided the county tax levy will grow, at most, 0.8 percent next year for a total sum of $129.41 million. That number could be revised downward by the time the budget is finalized Dec. 14, but it may not increase.
The Dakota County Regional Railroad Authority levy will grow $450,000, for a total levy of $1.64 million, to speed up transit planning along the Robert Street Corridor and advance a Bus Rapid Transit project along Cedar Avenue.
With property values declining, a home with the median taxable value of $222,400 in 2010 will have a median value of $206,100 in 2011, a 7.3 percent reduction in tax value. Because of the increase to the Regional Railroad Authority levy, the overall drop in property taxes will be 23 cents.
