News Flash

Wright County News

Posted on: September 14, 2020

County to Adopt Preliminary Budget, Levy at Tuesday's County Board Meeting

At its meeting tomorrow (Tuesday, Sept. 15), the Wright County Board of Commissioners has on its agenda adoption of its 2021 preliminary budget and levy. At a time when the world has changed dramatically due to the global COVID-19 pandemic, Wright County came into its budget process with a mandate – try to keep the actual amount paid in by taxpayers to be as flat as possible.

With more than $300 million in new construction in the county coming on the tax rolls this year, Commissioner Darek Vetsch said that the goal for the county was to keep any levy increase to not get above 5 percent, which the county accomplished.

In 2019, the county faced a budget crisis when the levy (the amount paid by home and landowners) spiked 17.3 percent, as previous decisions brought a confluence of increased payments on projects from back in the recession of the late 2000s and early 2010s.

At that time, the county board adopted a policy of financial forecasting and modeling to prevent another single-year spike of that size happening again. The 2020 levy represented an increase of 6.7 percent, which was largely offset by growth and new construction in the county. The bar was set higher for 2021 and county reached the mark it was seeking to try to keep the county portion of property tax statements flat.

“Our goal, based on what we figured we needed to have to have no change to the majority of taxpayers, was that we had to have a levy increase between 4.9 and 5.1 percent given new construction that is now part of the countywide tax base,” Vetsch said. “We hit right in the middle. We had to figure out how to thin down our numbers. We got better at it this year and I believe we’re going to continue to get better with what we need to budget for costs. Before, we weren’t following trends very much and did each budget year to year on its own. Now we have forecasting and modeling that looks three to four years back to help us forecast costs three to four years in the future. We’re using history to tell us where our numbers should be at.”

The county budget actually decreased in 2021 at $153,827,373 – down from $162,044,385 in 2020. But, Vetsch explained that the difference is almost entirely due to a road and bridge budget that was able to do some projects in 2020 that were slated for 2021 – the overall budget dropped $8.2 million and the road and bridge budget decreased by $9.5 million.

“The difference in the budget is primarily due to road and bridge,” Vetsch said. “We had a number of projects that we are not projecting to do until 2021 that we did in 2020. A lot of that has to do with the Local Option Sales Tax flow. Sometimes we bank up those funds and disperse them to do a lot of projects at one time. We received some federal funds early that we weren’t expecting to get early, so that contributed to the drop in that line item.”

The forecasting and modeling the county has implemented has also seen benefits in other areas. The capital projects fund for 2021 is reduced by $2 million as the result of projections of costs made previously that have come down and didn’t require the level of funding thought a year or two earlier.

Vetsch believes that the commitment to forward preparation based on experience and history will help keep Wright County government running efficiently. According to data from the Minnesota Secretary of State’s Office (https://www.auditor.state.mn.us/Search/CountySearch.aspx) from 2018 – the most recent tax year available, Wright County is near the bottom in net taxable levy and in many spending aspects of operating county government. Vetsch believes that with the system the county is employing, that will only continue as the county board attempts to keep spending limited to mirror its continued, sustained growth and spread any levy increases to equal that of the new homes and businesses that continue to make Wright County a growth county.

“A lot of this speaks to the beauty of our financial forecasting and modeling,” Vetsch said. “What we’ve done is put things like our capital improvement projects, try to vet them out to see what they would cost and forecast them out years in advance. It’s a model that assumes a worst-case scenario in terms of costs and hoping it won’t be that bad when that project needs to be done. It was able to put us in a situation to utilize fund balances to keep our levy low. We were actually able to shrink our tax rate during a difficult economic time. Taxpayers without changes to their property should see very little change to their taxes from the county perspective.”

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