Budgeting is the least favorite time of the year for all of us who are involved in local government.
It is the time when department heads propose spending for what they view as the equipment and/or the staff needed to provide better services and outcomes… or maybe just to meet new state and federal requirements.
For those of us in elected positions (commissioners, etc.), budgeting is the time when almost everything comes under question. Is it need or want? Does it make sense long-term? After all, we are the taxpayer’s representatives in this process and taxpayers don’t look favorably on increases in their tax bills without some solid justification.
With those positions in place on both sides of the process, budgeting has the chance of becoming a time of confrontation. While not always happy with the budgeting decisions, department heads in Polk County aren’t known to pout about the end result. And commissioners, while not ever gleeful about collecting more taxes, will go along with larger budgets when the reasons can be justified.
Now, before you get buried by a lot of big numbers that will follow, the definition of a few terms should be reiterated. “Levy” refers to the amount of money that is collected through property taxes to pay for operations. “Property taxes” are computed based upon the valuation (tax capacity) of property. “Valuations” are determined by sale prices of comparable properties. In total, these valuations make up the county’s “tax base.”
So, some thoughts about the current budgeting process:
• The 4.1 percent levy increase that the County Board approved in early September is the maximum that the levy can be raised. The percentage of increase can be reduced but it cannot be raised.
• A 4.1 percent levy increase does not mean that everyone’s tax bill will go up by that amount. Other factors enter into the process. Most notable is the change in the county’s total tax base. The good news for most of us is that the tax base has been increased by $441 million to a total of $4.269 BILLION. This additional tax base doesn’t generate any more revenue but it spreads out the levy.
• Most of the $441 million increase is attributed to the revaluation of agricultural lands. In the increase total, too, is $20.7 million from the “new construction” that has occurred in the county.
Page 2 of 2 - • A 4.1 percent levy increase would raise $731,458 in new revenue. However, negotiated salary and benefits increases for county employees for 2014 total $413,875, so the $317,583 that is leftover doesn’t go a long way in a world where everything seems to go up regardless of hard we want to keep that from happening.
• The overall levy for 2014 (based upon a 4.1 percent levy increase) would be $20,124,708. This is an increase of 2.3633% over the 2013 levy of $19,660,090.
• The initial budget requests made by department heads and by other agencies that are supported by the county levy (totaling about $1.38 million) include some “one-time” capital expenses that the County Board could elect to pay for from existing funds. Still, major reductions will have to be made during the next couple of months before a final budget is approved in December.
• The increases in ag land valuations (as the result of much higher sale prices) along with the addition of new construction valuation have kept the “county portion” of tax bills in check for homeowners. Again, this is for homeowners and refers only to the “county portion” of property tax bills, not the total bill.
(Note: Despite several valuation increases, the “county portion” of my property tax bill has actually gone down or at least held even in each of the last four years… and maybe longer if I were to look back in the records.)
On to the bottom line
So, what’s the bottom line in all of this? Homeowners are likely to get another of year of reprieve. But because of some good years on the farm, the high sale prices that have been paid for ag land will mean that landowners will see another increase in their bottom line.
That’s how the system works. If you are on the good side of the situation, be thankful. If you are a landowner, there will be a day when the results reverse… but the downside to that is that it will take falling land prices for it to happen.
For now, a 2.3633 percent increase in spending isn’t really out of line in today’s world where the cost of everything always goes up.
Thoughts expressed in this column are those of the author and are not necessarily a reflection of the opinions of the other members of the Polk County Board of Commissioners.