COOK COUNTY CONNECTIONS 2022 Final Levy and TNT

By: Braidy Powers, Cook County Auditor-Treasurer

COOK COUNTRY, MINNESOTA   January 1, 2023  (LSNews)  The county approved a 2023 preliminary levy of $11,601,646 on September 13. This was an increase of 5.5% over the 2022 levy and determined the upper limit for the 2023 final levy. The board also set the date for the truth-in-taxation (TNT) meeting as Tuesday November 29 at 6:00 p.m.  

The truth-in-taxation statements were mailed to taxpayers the week of November 14 and they showed large valuation increases across all major property classes. The county-wide average value increase over the previous year was about 35%. At the public meeting on November 29 the concerns raised by taxpayers in attendance centered on valuation increases. For most taxpayers, increases in value did not result in large tax increases because value increases were spread across most properties. There is still a misconception that value increases result in more taxes collected by the county. The county only collects the levy that is approved. A property’s value determines how much of that levy a property will pay. When a property’s value goes up the important point to watch is how much it rises in comparison to the average rise for all properties. 

The county scheduled meetings on December 13 and December 20 to discuss and determine its final budget and levy for 2023. On December 13 the board began the budget discussion by looking at the costs for implementing a recently completed compensation study. The board had authorized the study several months earlier to determine if cook county wages were staying competitive with other counties. Cook county has suffered high turnover rates in recent years with almost one-fifth of employees leaving county employment in 2022. High turnover rates are being felt statewide and nationally for many reasons including reduced workforce numbers and the acceleration of the ability of employees to work anywhere from home, helping to fuel competition for workers and resulting higher wages. The study used a group of counties facing similar challenges, including housing values and rental rates, to compute an average wage scale to be used as a benchmark. The study showed cook county workers being paid at about 84% of the benchmark minimums. The board looked at the cost for moving wage scales to either 90% or 95% of the benchmark counties and put off a decision until the December 20 meeting when more information on the county’s fund balances would be available. 

A second factor considered in setting the levy was the reappraisal of the Boundary Waters Canoe Area lands. The county receives around $2 million a year from the federal government for BWCA lands based on the value of those acres. The principle behind these payments is if the acres were privately held the county would collect property taxes. The payment is used to offset the county levy. The every-10-year required appraisal, last done in 2019, cut that payment by a third to around $1.3 million. But the cut was temporarily delayed when the forest service agreed to reappraise those lands. The initial look at the reappraised numbers restored a small part of the reduction of the value but final numbers won’t be known until 2023. We have continued to receive the almost $2 million since 2019, setting aside 1/3 for the required repayment if the lower values are affirmed.   

Continued inflation was also a factor. Higher costs are affecting 2022 financial results and the likelihood that we will add to our fund balances. County infrastructure needs are both a long and short-term issue. The county began a capital improvement plan in 2022 to help deal with our aging infrastructure and the deferred work that needs to be done. The completion of the plan is expected in early 2023 after a series of public information sessions. The plan will give us vital information for the current and long-term costs of maintaining infrastructure and for meeting space needs. The potential for the high interest rates in the bond market to continue are an incentive to build up fund balances to reduce bonding costs for future infrastructure projects.

The board spent considerable time discussing the merits of cutting the levy, using more reserve funds to make up the difference, versus leaving it at the 5.5% maximum. The average levy increase over the last 33 years has been 4.35%. The board is committed to finding ways to reduce long-term costs without affecting service levels. The investment in the Capital Improvement Plan is one example of this commitment. The board finally ended the discussion by voting to leave the levy at 5.5%.  

At the next meeting on December 20, the board resumed discussion of the compensation study options.  Information provided at the meeting showed that county fund balances were sufficient to cover additional costs of either the 90% or 95% of benchmark options. There was also consideration of using some of the American Rescue Plan Act dollars awarded to the county in 2022 to help cover the compensation costs. After weighing all the factors, the board voted to approve the 95% option, using fund balance to keep the levy at the 5.5% maximum.

By: Braidy Powers, Cook County Auditor-Treasurer

County Connections is a column on timely topics and service information from your Cook County government. Cook County – Supporting Community Through Quality Public Service

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