The following article has been updated from print as a review from the county was pending at the time of publishing.
Watonwan County's Truth in Taxation public hearing took place on Tuesday night. The meeting was solely informational regarding budget and taxation issues within the county.
The county auditor and treasurer, Kelly Pauling, began with an overview of a Truth In Taxation statement sample. The report divides information into three sections: the county, the township, and the school district. The overall tax percentage is always at the bottom of the statement. In 2020 the total taxable market value increased by 8%, and the county's levy went up by 4%. The 8% increase would create a reduction in county taxes if the estimated market value didn't change from 2019 to 2020.
One item that will reduce the taxable market value is the homestead market value exclusion. It's a 40% reduction in home value if someone is living in the home. It maxes out at $76,000, then declines 9% of the market value over $76,000. For a homestead valued more than $413,800, there is no valuation exclusion.
The agricultural homestead market value credit maxes out at $490. The taxes are calculated on the statement, and then it'll show a $490 reduction. It's a state payment to the county instead of a reduction of value.
The school building bond agricultural credit has been active for at least two years. "So, for all those building bond referendums we're going through to fix up the school buildings, there is a credit that ag land receives, and it's currently at 40%," said Pauling. Pauling added the legislature recently made a change, wherein 2020, the percentage goes up to 50% before going incrementally over the next few years. It'll cap at 70% in 2023.
The final big factor is the agricultural homestead first-tier valuation limit. At the first $1,880,000 of value, the tax class rate is at .5%. Any land that goes over that amount jumps to 1%. The valuation limit maxed out in 2015 at $2,140,000.
"As land values have decreased, that tier one has decreased also," said Pauling, "and I would say it's going to keep decreasing. It's a ratio of the statewide average taxable market value of agricultural property by acre."
There are many more factors that affect properties, but Pauling went over the main ones.
Budget meetings took place in August, where all the departments presented their requests. Within the general fund, there was a levy increase of 1.6% over the last year, and there's a planned increase in fund balance of $49, 737, a 1.6% increase. It includes environmental services, public safety, auditor's office recorder, and more. A few of the more massive dollar amounts within the general fund included the license center at 17.7%, the general government at 22.2%, and the motor pool at 42.1%.
The library fund has a 7.5% increase. Staffing costs included a 2.5% COLA and a 5% increase in insurance premiums. The budget also includes replacing a copier. The budget doesn't contain anything for capital projects, but there is still a dollar amount set aside if a project comes up.
After legislative changes for 2020, the county program aid increased by 18.3%, "which is huge for a county like ours," said Pauling. County Program Aid is based on county need aid and county tax base equalization aid.
After the county program aid was figured in, the general fund came at a levy increase of .84%, solid waste at -.76%, road and bridge at 36.7%, library at 6.71%, and human services at -1.82%. The total balance used to calculate taxes is $10,326,011.
Director Naomi Ochsendorf presented the human services department budget, where a significant portion is funded through federal, state, and miscellaneous revenue. Federal revenue was a little over $14 million, state revenue was almost over $13.5 million, and miscellaneous income was $582,000. Watonwan is ranked 43rd of 87 counties in how money is spent per capita. The primary services at Human Services are public health, income maintenance, child support, substance use, child services, and adult services, to name the main few.
Director Teal Spellman explained the public works department budget and the 36.7% proposed increase.
"The majority of that is due to additional equipment that we, as the road and bridge department, are requesting," said Spellman. "We kind of fell behind with our equipment, and a lot of it needed to be done a while ago."
Spellman described having big-ticket repairs that had to happen to keep the department operating. The department is asking for more money to be set aside for equipment replacements to keep from falling behind in the future. Future equipment includes a motor grader, a truck, and miscellaneous items. Their current vehicle is obsolete, nonfunctional, and taking up space.
"We do have additional pieces of equipment we're not necessarily replacing from our current fleet," said Spellman, "but we're adding to our fleet to keep up with the times and just to better do our jobs."
The additional items include a 20" tilt trailer and a road groomer. Regarding projects, the department plans to do more resurfacing next year, mostly in the southwest portion of the county. There's also a project in Madelia, but it's municipal, where the state funds it.
The department's next effort towards the parks include public outreach to understand better what the public wants before any dollars are spent. A bleacher rental is budgeted for the fairgrounds, as the current wooden bleachers are warped.
The final levy/budget adoption date is December 17.