The Anoka County Board of Commissioners announced last week that their 2012 budget would include a reduction of property taxes of $8.14 million, marking a 7.43 percent decrease from the previous year and the first time in 30 years that spending for the next fiscal year will be less than the current budget projections.
Last week the Anoka County board passed a budget containing a $98,531,229 million net tax levy. The proposed spending reductions, contained in the draft 2012 county budget, will occur in spite of reductions in state aid and the elimination of the Market Value Home Credit (MVHC).
“This levy is a direct reflection of our community and our mission,” said Chairman of the Board of Commissioners Rhonda Sivarajah. “Our mission is to be respectful, innovative, and fiscally responsible, and we are accomplishing this by recognizing that our residents don’t deserve to be taxed any more, and frankly, they can’t take it.”
So how did they do it? Could other counties copy their template? For starters, it’s important to note that significant budget reduction did not happen overnight, but instead has been in the works for the past year.
“We were proactive. We knew it was going to be a difficult year and we expected to lose $7 million or more,” said Sivarajah. “We started early and gave staff the direction to make reductions that had the least impact on the constituents we serve.“
One of the measures employed by Sivarajah and Commissioners was alerting county staff in April that each department would need to reduce spending by three to four percent for the coming fiscal year. Additionally, staff was notified that reductions from the state would have to be absorbed within each department.
For the first time in recent memory, Sivarajah noted, the board turned to county employees for budget-saving suggestions.
“In past years at work sessions, staff would be directed to show cuts that would ‘show the pain.’ I think that is wrong and incredibly disingenuous,” said Sivarajah. “We asked staff how they could do things more efficiently in their own department.”
By May 1 the board already had millions of dollars in reductions in place for the current budget. The new figures reduced the 2011 budget by $3.8-3.9 million, allowing commissioners to carry that new baseline into the 2012 budget.
Moreover, the county was able to save employment costs through various means, including a one-time voluntary separation program that 97 employees utilized, that should save taxpayers $1.5 million in salary and benefits going forward. The 2011 budget already had 62 fewer positions than 2010, and an additional 20 slots are expected to remain unfunded and vacant in the 2012 budget.
Sivarajah noted that holding positions open has been more economical than turning to layoffs, reiterating that the board started making decisions to keep positions open as they were vacated. The county could also restructure or hire replacements at a lower pay rate to continue future savings.
Taxpayers will also find relief from a 65 percent reduction in the Anoka County Regional Rail Authority property tax levy, which is the lowest since 2002.
“Rather than sitting on reserves that belong to the taxpayers, we’re giving that back. Our 2012 levy is paying for our portion of the debt service on Northstar and the Northstar Link,” explained Sivarajah. “We’re using nearly $2 million in reserves to bring down the levy.”
Sivarajah said the response on the proposed budget has been positive, citing emails from constituents saying ‘thank you’ and messages saying the changes were ‘long overdue.’
“It shows our constituents in the county that elections do matter. It sends the right message.”