Mille Lacs County Budget 2024

Mille Lacs County is required to certify a preliminary property tax levy each September for the following year. The levy is based on the County’s estimated operating budget for the following year, and reflects the amount of property taxes needed to fund operations after accounting for other revenue and expenditures. In 2024, that amount is $24,863,577, which represents a 8.99% increase over the 2023 levy, and a slight tax rate decrease.

Preliminary Levy

Levy Impact. The chart below shows how property tax dollars are allocated to each service area or department based on the approved preliminary levy for 2024.

While the preliminary levy adopted on September 19, 2023 is an increase over the final levy adopted for taxes payable 2024, the County's tax capacity has increased greatly. This means that many taxpayers may actually see lower County property taxes in 2024; in fact, preliminary estimates indicate that 2024's tax rate will be Mille Lacs County's fifth-lowest in the last 30 years. As depicted below, the tax rate does not rise and fall in conjunction with the levy; it's impacted greatly by the taxable market value of all properties in the County.

Budgeting Process

The budgeting process started in May, with individual departments reviewing historical revenue and expenditure data, using that information to assemble their proposed budgets. These individual department budgets are reviewed with the Administrative Services Office and compiled to form the complete county-wide budget. Subsequently, staff meets with the County Administrator and County Board of Commissioners to review the proposed budgets and make adjustments before setting the preliminary property tax levy.

Preliminary Budget Reductions. Every year, the process between initial submittal of preliminary budget proposals and adoption of the preliminary budget and levy includes multiple rounds of review and reduction in order to seek a preliminary levy that is appropriate. The process in 2024 was no different.

In evaluating proposed budgets and prospective cuts, County staff and elected officials reviewed a number of metrics to assess the allocation of financial resources. One of those was the budgeted levy by service area, before accounting for County Program Aid. This is a measure of how property tax dollars are allocated to each of the five major budget areas; General Government (which includes capital projects), Public Safety, Community and Veterans Services (CVS), Public Works, and Debt Service. 

From 2005 to 2021 the County's property tax levy increased 39%; over that same time, the levy for Public Safety increased 130%. Over that same time frame, Public Safety expenditures increased at a 37% higher pace than all other County expenditures, on average. However, in recent years, there has been some additional variability with capital projects. The chart below shows the total levy amount, before County Program Aid, for each area; 2024 figures are based on the preliminary levy adopted on September 19, 2023.

Another item analyzed when evaluating budget proposals was key metrics, such as staffing, total property tax levy, and budgeted expenditures. For comparison purposes, data was compiled from comparable counties, neighboring counties, and counties statewide, depending on the metric being analyzed.

• Staffing: The County's full-time equivalent (FTE) employees per 1,000 citizens, is slightly lower than the average, with 9.08 budgeted FTE per 1,000 citizens in 2023, compared to Minnesota county average of 10.4 FTE per 1,000 citizens. A slight increase in key positions is budgeted for 2024, in part, as a response to an influx of State-mandated programming and associated funding.
• Property Tax Levy: The County's levy per capita, or, total levied dollars per citizen, was $862.17 per person in 2023, compared to the Minnesota county average of $805 per person.

Budget Variables

The increase being proposed for 2024 is a reflection of many variables; some of these items are unique to the 2024 budget cycle, while others have persisted (and may continue to persist) for years. Some of these variables include:

Depletion of fund balances. The County had been operating significantly below those fund balance guidelines established by the State Auditor’s Office. The County’s 2021 Financial Statement, prepared by the State Auditor, lists a total unrestricted general fund balance of $1,769,554 at the end of 2020, only 1.5% of total General Fund expenditures. The chart below depicts general fund balances in comparison to recommended fund balances from the State Auditor's Office. However, great strides have been made in the last three years to restore the County's financial condition.

The ongoing lawsuit with the Mille Lacs Band of Ojibwe. The Mille Lacs Band brought a suit against Mille Lacs County, County Sheriff, and County Attorney in regards to the revocation of the cooperative law enforcement agreement in 2016. In response, the County was forced to obtain outside counsel, spending approximately $9.5 million to-date on attorney’s fees. The decision was made, in 2023, to appeal the lower court's ruling. The graph below depicts year-to-date figures as of November 1, 2023.

Increasing costs of operations. Health care cost increases and a historically-tight labor market have necessitated regular increases to both wages and health care premium contributions. The increasing pace of inflation has pushed this issue to the forefront nationally and here at home, affecting budget line items from salaries and wages to fuel and supplies.