For Dakota County, Pawlenty's cuts could mean loss of $14 million
It's looking bad, and it is probably going to get worse.
The news about how Minnesota Gov. Tim Pawlenty plans to balance the state's budget would have a significant impact on Dakota County, Dakota County Finance Director Matt Smith told the Dakota County Board of Commissioners Tuesday. The state must close an expected budget shortfall of $1.2 billion by the end of June.
If the governor's recommendations become permanent, it would mean a loss of $6.3 million in county program aid during 2010 and $8 million in 2011.
There would also be a loss of other revenues in community services, a proposed permanent continuation of levy limits, and significant impacts to low-income county residents through other programs, Smith said.
Through the Statewide Health Improvement Program, the county may lose $177,000 over two years.
The entire state subsidy for the Sentence to Service work crews would be eliminated. That is about $143,000 a year for the county.
That would likely result in additional jail days and costs, estimated at about $800,000.
The work crews are considered an importance resource for parks, facilities and cities within the county.
This is not the first time the county has experienced state cuts, Smith noted. There have been others in 2008 and 2009. The governors' unallotment cut $2.2 million in 2008 and another 2.8 million in aid to the county.
"This is kind of a bad layer cake," Smith said.
There are future risks to the county, Smith said, including cuts of $4.6 million in county program aid in 2011, $5.4 million of market value homestead credit, and $5 million of other general state revenue.
The county has taken steps to address the loss of state aid in previous years, Smith said.
In 2008, it lowered the year-end balance, imposed a soft hiring freeze, and reduced the number of vehicle purchases.
In 2009, the county again reduced its fund balances and reduced its equipment purchases travel and training. The budget for 2010 eliminated 55 positions and reduced the levy share capital budget by $1.8 million.
It is not over, Smith stressed.
The current estimated impact for the 2011 budget and beyond is $9.2 million. That figure is the equivalent of 109 full-time positions, or $46 million taken from the 2010 to 2014 capital improvement program, or a 7.2 percent increase in property tax levy.
Commissioner Joseph Harris of Hastings questioned the county's approach to the proposed cuts.
"It is difficult to get a handle around it," he said. The county is receiving opposing messages from the state administration and state legislature.
County Administrator Brandt Richardson said the proposed cuts are "very sobering" news for the county. The county management staff will be bringing their approaches on how to address the cuts to the commissioners administrative finance practices committee meeting in March.