Supervisor proposes plan to lower tax levy by $1.5 M
By Kevin O’Brien
A Marathon County board member has a plan to cut next year’s property taxes by $1.5 million by diverting money from a Social Services fund that has accumulated millions of dollars in unspent money over the past few years and using it to pay down debt. However, his proposal has run into opposition from supervisors worried about the longterm impact on county finances.
By reducing the amount of tax dollars going into the Social Improvement Fund (SIF), supervisor David Baker said the county will be able to use that money to drop its overall 2024 property tax levy from a proposed $58 million down to $56.5 million. Instead of a 5.7 percent tax hike next year, he said the levy increase would be about 2.9 percent.
The $1.5 million would be spent to offset the debt service portion of the levy, so it would not affect the county’s ability to increase its levy for operational expenses in the future, Baker said.
“It doesn’t reduce the 2024 budget expenditures for the Social Services in any way, and it should have no impact on our ability to provide needed services to the residents of Marathon County,” he said at an Oct. 4 meeting of the Health and Human Services Committee, which voted to recommend his proposal.
On Tuesday, however, the Human Resources, Finance and Personnel (HRFP) declined to advance Baker’s proposal to the full board for possible approval. Supervisor Gayle Marshall made a motion to pass the amendment, but it died due to lack of a second.
Marshall noted that the SIF balance has grown from less than $4 million to $14 million since 2018, and Baker’s amendment would only keep another $1.5 million from going into the fund next year.
“When you delay tax relief to people, I believe that’s a disservice to our citizens,” she said.
Supervisor Corey Hart, on the other hand, said he was uncomfortable with Baker’s proposal.
“I have larger concerns about the longterm ramifications of borrowing from our savings to pay debt,” he said. “I just think that’s a really bad precedent to be setting.”
The SIF, which pays for various Social Services programs, has been growing by about $3 million a year for the last several years, resulting in a fund balance of $14 million. Under Baker’s proposal, the amount of tax dollars going into the fund next year would drop from about $6.9 million down to $5.4 million.
“There’s $14 million there as a buffer, so I don’t see that we would be putting the county in jeopardy,” he said.
When asked what she thought about Baker’s proposal at the Oct. 4 meeting, Social Services director Christa Jensen said the SIF is “quite healthy” and she would not have any “significant concerns” about reducing next year’s tax contribution. However, she said a certain amount of money needs to be kept in reserves.
“We need to make sure we have funds in there in the event we have (child) placements we don’t account for, particularly high-cost placements,” she said, pointing to the Lincoln Hills correctional facility as an example. “A couple kids who make some really bad decisions can really make a huge difference in our budget.”
During a budget presentation at the board’s Sept. 26 meeting, finance director Kristi Palmer said the SIF’s balance increased by $3.6 million at the end of 2022, mostly due to multiple staff vacancies, lower-than-expected contractual costs and fewer high-cost foster care placements last year.
However, Palmer also noted that the cost for juvenile correctional care will be almost $500,000 per child next year.
“If you budget for one child all year and you now have two children there, you’ve just doubled that cost,” she said. “So, it can go up and down and fluctuate.”
Palmer said a portion of the SIF surplus should have been included in the yearly rollover of funds to pay for capital improvement projects – as required by county policy – but that did not happen for a couple of years because of staff turnover in Social Services.
At Tuesday’s HRFP meeting, board chairman Kurt Gibbs said supervisors need to develop a longterm plan for paying down the county’s nearly $100 million in outstanding debt that doesn’t rely on one-time dips into reserve funds.
Committee chairman John Robinson said he appreciated Baker for drawing attention to the exponential growth in the SIF fund, but he believes that excess money should really be set aside for future capital improvement projects. Robinson noted that Baker’s proposal can still be reintroduced before the budget is adopted on Nov. 9.
“Any items are still fair game,” he said.
