When people get their property tax bills in the mail, they usually go right to the bottom line… to where it tells them how much they owe. And when they don’t like that number the county seems to get a lot of the blame.
That’s because the bill comes from the county. The county name is on the return address and it is there again on the top of the statement. A contributing factor, too, is that county assessors determine property valuations.
Counties are, of course, responsible for a portion of the number at the bottom of the statement but they aren’t alone. Cities and/or townships have a part in the total. So do school districts, the watersheds, the Northwest Regional Development Commission, ambulance districts, the voter approved levies for school districts, special tax districts, and any special assessments made to pay for streets, etc. All have a part in that big number at the bottom of the page.
Counties are, of course, guilty for what they spend in providing the different services, many of which are mandated by law. It has been said that from 65 to 70 percent of what counties do — especially in the area of social services — is required through their role in managing and providing many services. This, in effect, makes them an extension of state and federal government.
To deliver those services and perform its duties, counties provide and maintain the needed infrastructure… trained staff along with buildings, roads, equipment, etc.
On the spending subject, Polk County will increase that number in 2019 by $741,256, or 3.253 percent. Of the total budget of $67.7 million, $23.5 million will be generated by the “tax levy” (the amount paid by county property owners) with $42.9 million coming from the state and federal governments. The state and federal dollars are basically meant to fund programs they have created.
About $1.1 million in county reserves is being used to reduce the levy. Reserves will be directed to pay for some of the capital improvement projects that are scheduled in 2019. Once addressed, these “one-time” projects won’t a drag on future budgets, at least not for a few years. Examples of one-time expenses include such things as roofs, remodeling, heating and cooling system updates, elevators, the backbone of the electronic information management system, etc.
None of us likes it, but costs go up. When government bodies, as a way to avoid increasing taxes, put off making needed infrastructure updates, they are just pushing the problem down the road. The issue doesn’t go away, just becomes more critical and more expensive. Long range planning in this area is so very important.
The County Board tries to keep spending increases at about the same rate as inflation. The 3.253% percent increase for this year is less than the 3.5% increase that was budgeted for 2018. The average levy increase over the past 10 years has been 2.6%.
Some of the effect of the increased spending in 2019 will be offset by the fact that $26.8 million in valuation from new construction has been added to the county’s valuation total. These properties will be paying taxes for the first time in 2019.
Two big issues
Beyond normal operations, two major issues — both involving Enbridge Pipeline Co. — will be on the table this year. They are:
• Enbridge’s challenge to the valuation of its Line 3 pipeline that runs through 13 Minnesota counties on its way from North Dakota to Superior, Wis. The Minnesota Department of Revenue (DOR) determines the pipeline valuations and counties use that number in determining the property tax.
The Minnesota Tax Court has ruled that the valuations set for Line 3 were too high. The DOR is now appealing that ruling to State Supreme Court.
For the three years in the challenge (2012-2014), Enbridge thinks it should receive a refund of $1.8 million… and that’s just for those three years. Since receiving the favorable Tax Court ruling, Enbridge has also filed challenges to the Line 3 valuations for the years 2015-2018.
Other pipelines, along with the railroads and electric utilities, are watching these proceedings for the possibility — make that the opportunity — of challenging their valuations. It is not likely that there will be a quick solution to this problem. Instead, it has all the possibility of becoming very ugly financially.
• There is also the likelihood that protesting will occur if and when Enbridge gets all of the permits needed to start a 337-mile, $2.6 billion project to replace the 50-year-old Line 3 pipeline. The project would only run through three townships in the far northeast area of the county but, with the mutual aide agreements that are in place, Polk could become quite heavily involved in any effort to protect private property and keep the protesting orderly. That, too, could become ugly.
So as 2019 begins, these are some of the things that are on the minds of your Polk County commissioners. Wish us well.
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.