Community forum answers questions about local taxes
MORRIS - Money - how governments get it and how they choose to use it - was the topic of a community forum on Tuesday designed to help citizens better understand the government budget process.
As property taxes go up and state aid to local units of government goes down (or just doesn't rise fast enough), those who make budgets are left with a balancing act: how do we provide services at a level we are comfortable with and stay within our fiscal limitations?
Morris City Manager Blaine Hill, Stevens County County Coordinator Brian Giese and Morris Area Superintendent Scott Monson articulated those challenges and answered questions about the government budget process during the "Your Government - Your Taxes" community public forum, a program organized by three recent graduates of the Blandin Community Leadership Program: Holly Witt, Allan Saugstad and Don Reicosky.
To begin, Hill, Giese and Monson were each given a 10 minute opening statement to address four questions questions:
How are the city, county and school organized?
What is your budget process?
How is public input considered in the budget process?
How will issues like the Market Value Homestead Credit impact city, county and school taxes?
Following their presentations, the floor was opened up for questions from the audience. Reicosky emphasized that this portion of the program was meant to be educational, not political.
Although all three local government entities have the power to levy property taxes, a fair portion of each of their budgets comes directly from the state through various local government aid programs. A challenge to developing the budget is dealing with changes to state aid each year.
"Morris could not run on taxes from here alone," said Hill. About 60 percent of the city's budget comes through Local Government Aid from the state.
Monson said that the school does receive more money per student now than they did 10 years ago, but those increases lag behind increased costs for services.
The county receives about seven percent of its budget from state County Program Aid, but a bigger piece, said Giese, is money for state aid roads and bridges and state and federal human services.
"I think it's a pretty safe assumption that we earn more or receive more from the state than we contribute to the state as a local population," concurred Giese.
What follow is a summary of Hill, Giese and Monson's comments during their presentations about how they budget process works and the impact of public input.
City of Morris: City manager runs day-to-day operations
The City of Morris was formed by a charter, and, according to Hill, was the first city in Minnesota to adopt a city manager style of government. Under this model, the elected city council hires a city manager, then turns over the day-to-day operations of the city to the city manager.
In addition to the elected city council and city manager, Morris also has six advisory boards - Tree Board, Park Board, Community Education Advisory Board, Airport Advisory Board, Housing and Redevelopment Authority and Tourism Board - and four commissions - Planning Commission, Human Rights Commission, Rental Housing Commission and Civil Service Commission.
The city also works with the Library Board, the only city department that has a mandated funding level through state legislation.
As city manager, Hill said his responsibility is "to watch over all [the departments] for the city council."
Hill said the city manager is responsible for watching over and preparing the budget to present to the city council for approval. Watching the legislature is a key part of this process, as most of the funding for the city comes from the state through Local Government Aid.
While the city does have authority to work on improvement projects and road projects, for example, without going to the voters, if a project is going to be taxed generally (a swimming pool, for example), the city is required to go to referendum, Hill said.
Key input for city decisions comes from the city council, said Hill, because the city uses representative government. Members of the city's various boards and commissions also offer input on the city budget.
"I'm responsible for putting together budget, and I can tell you I go out and talk to as many people as I can," said Hill. The city also holds a public budget hearing for public comments.
"Most of the stuff that we do, we have to do," said Hill. "There's not a lot of discretionary stuff that we're going to sit around and talk about ... What we look at is at what level are we going to provide those services, and that's where it gets very difficult sometimes."
Stevens County: Legislature dictates services to provide
Unlike a city or school district, the county cannot do something unless the Legislature specifically says that it can.
"What's unique to Stevens County is that we can't just decide to do something more," said Giese. "Oftentimes we need to seek special legislation to do unique things."
Each county has the authority to decide what sort of governance model to use. Stevens County is run using a coordinator model, where the Board of Commissioners outline what authority the County Coordinator possesses.
"In our particular example, [the coordinator's job is] basically to clerk for the county board and facilitate conversations between the [county's] 12 department heads, who are ultimately responsible for their own departments and have authority to control their employees and budget," said Giese.
Four of the 12 department heads in Stevens County are elected - county attorney, auditor/treasurer, recorder and sheriff - and answer to the public at the ballot box every four years, said Giese. However, the Board of Commissioners does have control over all department budgets.
Stevens County also works with a number of quasi-governmental agencies that provide services in the county: Stevens Traverse Grant Public Health, the Soil and Water Conservation District, and the Housing and Redevelopment Authority.
Each year, county officials track the budget month-by-month in each department. In June, department heads look at their budgets and prepare a speculation for the next year. In July, the county coordinator compiles a budget and presents it to the board.
"We spend the next couple of months ... refining that and negotiating between department heads who want to 'lobby' for their own department and the board who has this overarching authority and a vision for where we're gonna go," said Giese.
The board is required to pass a preliminary budget and levy by Sept. 15. Between then and when the final budget and levy are passed in December, the overall budget can go up or down but the levy can only go down.
Giese said the county received two types of public input: limited direct input at public meetings and indirect input based on issues that have become "hot topics" in the community.
For example, this year the county received comments about gravel road maintenance, and, as a result, added more money to the road and bridge fund to address that issue moving forward, said Giese.
"Elected board members and department heads get information from the community members that know them well or their constituency and bring that forth in these public meetings," said Giese.
School District: Final budget set in June, not December
School districts operate on a different fiscal year schedule than other local units of government, which makes their budgeting process slightly more complicated.
The district approves a preliminary levy certification in September or October and a final levy in December. However, since the districts fiscal year does not start until July 1 of the following year, the school board often needs to make budget adjustments in January, February and March.
Decisions at that time include things like the number of sections per grade, staffing, programs and fees.
"We are cautious as we look into the future, and we take a conservative approach with budgeting because there are so many things that can change," said Monson.
Enrollment makes up about 75 percent of the districts revenue each year, so knowing where students come from is "huge" for the district, explained Monson. The district looks a few years into the future to try and guess how many students will be entering and leaving school each year.
"In some years we've had to make budget adjustments and reduce programs and people," said Monson. "Fortunately - knock on wood - we've seen some really positive things happen from a financial perspective in our district and we haven't had to do that the last few years."
The final budget is then approved in June - a requirement so the district can pay bills in July.
In addition to enrollment, the school's budget is also impacted by decisions by the state legislature, operating levies, and decisions by the school board about what programs to participate in that are funded through local taxpayer dollars ("discretionary levies"), said Monson.
This year, 114 school districts in Minnesota are asking for operating levies - Morris is not one of them. Morris renewed and added to an operating levy last November, and will likely ask for another levy renewal when a current levy expires in 2016, said Monson.
Although all school board meetings are open and includes a time during the agenda, Monson said the board often doesn't receive much public input on decisions.
"I'll be honest with you - and this is not a negative statement - but we don't have a lot of public input on the budget process unless we're making reductions in programs and positions," said Monson. "I don't know why that is; I guess there's a certain amount of trust in our school board ... and the people running our district."