On Republican fiscal accountability: Pass the buck, please!

"There’s no question that (Gov. Tim) Pawlenty’s ‘no new taxes’ approach is to move many obligations to counties." — Minnesota Sen. John Hottinger

"[U.S.] Senate Democrats tried to restore ... Medicaid cuts, which hurt our neediest citizens; but unfortunately, the Republican majority preferred more tax cuts for the rich and superrich at the expense of everyone else." — U.S. Sen. Mark Dayton

A recent article in the Mankato Free Press details how Blue Earth County Administrator Dennis McCoy and Nicollet County Administrator Robert Podhradsky are not real happy with the federal government (see "Property tax levy increase unclear" below). That's because last year's so-called Budget Reconciliation Act and the previous year's cleverly titled Deficit Reduction Act shift mandated health care and social services costs to county governments.

Now Rebecca Otto offers convincing evidence that "no new taxes" at the state level creates higher taxes at the local level. And need we use the "f" word — fees? And as thousands of students head off to Minnesota's technical schools, colleges and universities, parents are asking: "Why does it cost so much?"

Parents, seniors and everyone else: Just wait till you see your next property tax bill!

Property tax levy increase unclear
Federal, state impact debated

By Dan Linehan
Free Press Staff Writer

MANKATO — Minnesota’s senators are working, their spokespeople say, to urge the federal government to reconsider a funding change that Blue Earth County officials say could trigger a 9.5 increase to next year’s property tax levy.

The precise funding implications of last year’s Budget Reconciliation Act aren’t yet clear, but County Administrator Dennis McCoy says that about three-fourths of the levy increase could be caused by state and federal cutbacks.

State and federal lawmakers responded to that complaint along party lines; Democrats agreed wholeheartedly and most Republicans said the county ought to start making some hard choices.

Much of the projected federal shortfall comes as a result of the Deficit Reduction Act of 2005. Among other changes, it redefines what counties can spend on targeted case management, which provides free case workers to the mentally ill.

McCoy blames that act with reducing human services spending on preventative social work by about $664,000.

Nicollet County’s administrator, Robert Podhradsky, said his county could stand to lose $420,000, a large chunk of his $6 million social services budget. And dropping those services isn’t seen as a viable option in either county.

Even so, those numbers are still estimates because the government has yet to clearly explain what kinds of services it will and will not cover under the new rules.

The story is replaying itself around the state, said Jim Mulder, executive director of the Association of Minnesota Counties, an advocacy group. The top three budgetary concerns are paying for those human services cuts, the state’s costly decision to commit more sex offenders to treatment centers and rising fuel costs.

McCoy says the state’s decision to have counties pay for sex offenders’ civil commitment will cost this county’s taxpayers about $157,000 next year. He also says fuel prices have risen by about 14 percent over the past year. As for the human services cuts, Mulder says Minnesota is being hurt for relying more heavily than most other states on such preventative care, for being “ahead of the curve.”

He said that almost every county in the state is looking to maintain such mental health spending, either by cutting elsewhere or by raising property taxes.

Republican State Rep. Tony Cornish, R-Good Thunder, is advising the county to avoid raising the levy.

He says that average citizens — “Joe and Mary Lunchpail” — don’t like to hear about rising tax levies while their county has excellent tax base growth and the highest per-capita fund balance in the state.

Cornish also says the county may have to decide to cut programs it considers important.

“There’s no doubt that there are things that the state used to do that they chose not to do anymore,” he said. “The county has to make up its mind about whether it can say no, too.”

State Sen. John Hottinger, a Democrat, disagrees. “The counties are right, the cities are right, the schools are right,” he said. “There’s no question that (Gov. Tim) Pawlenty’s ‘no new taxes’ approach is to move many obligations to counties.”

A spokesperson for the Pawlenty administration acknowledged that the governor has committed more sex offenders over the past few years, but said “I find it hard to imagine that anyone would support putting sex offenders on the streets because of a budget issue.”

He also said the federal government often tells the state what to do and doesn’t pay for it. It’s just a reality of how government functions, he suggested.

Rep. Gil Gutknecht’s communications director, Jon Yarian, said the Republican congressman has been working since January to connect local and federal officials to clear up confusion about the legislation’s local impact.

Sen. Mark Dayton, a Democrat, took a similar viewpoint to Hottinger, though his finger is pointed at President Bush and Republicans in Congress.

He was busy on a tour last week, a spokeswoman said, so she submitted a quote by e-mail that she said was directly from the Senator: “Blue Earth County taxpayers will pay the price for the Republican Congress’s wrong priorities. Senate Democrats tried to restore those Medicaid cuts, which hurt our neediest citizens; but unfortunately, the Republican majority preferred more tax cuts for the rich and superrich at the expense of everyone else.”

The spokeswoman also wrote that Dayton continues to support the full funding of these social services.

Republican Sen. Norm Coleman gave a more nuanced response, also through a spokesperson’s e-mail. “I have been concerned that provisions in the Deficit Reduction Bill are being interpreted in a way that may reduce Minnesota counties’ ability to care for foster children ... Earlier this year, I sent a letter to the Director of the (Centers for Medicare and Medicaid Services) urging for this law to be interpreted in a way that does not limit funding for Minnesota’s counties.”

The impact of this debate on property taxes isn’t perfectly clear. The county will set its preliminary levy sometime over the next several weeks. And it’s important to note that property taxes won’t necessarily rise by 9.5 percent; an expanding tax base will cover some of that increase, though it’s not yet clear how much.

What is clear is that county officials expect those federal and state cuts to cost more money locally, whether or not it’s covered by an overall increase in tax collections.