Supervisor proposes plan to lower tax levy by $1.5M
A Marathon County board member has a plan to cut next year’s property tax levy 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.
Supervisor David Baker spoke to the Health and Human Services Committee about his proposal last week, and committee members voted to refer it to Human Resources, Finance and Personnel for further discussion and possible advancement to the full board.
By reducing the amount of tax dollars going to the Social Improvement Fund (SIF), Baker said the county will be able to use that money to cut its overall property tax levy from a proposed $57.9 million down to $56.4 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 reduction would be in 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.
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, Baker noted. Under his 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, 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 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.”
County administrator Lance Leonhard told the board that supervisors in prior years had increased yearly allocations for out-of-home child placements due to the opioid epidemic, which contributed to the significant growth of the SIF over time. He said it’s up to current supervisors to decide what to do with those funds.
“You have a lot of options,” he said. Supervisor John Robinson, chair of HRFP, said he has some concerns about the wording of Baker’s proposal, including how it would impact the expenditures for Social Services programs. He also noted that unspent money normally goes into the county’s capital improvements program.
