2019.01.23 CC Packet - Goal Setting Session

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LOCAL PROPERTY TAXPAYER PROTECTION Position: Washington County seeks to protect our local taxpayers from any further shifts of state costs to the county property tax (which is a regressive and unpopular form of taxation) and the potential erosion of our ability to deliver high quality, essential services in an efficient manner. We encourage the legislature and the Governor to provide flexibility and full funding for any mandates imposed on local governments. Issue: County governments are tasked by both the state and federal governments to carry out mandated programs on their behalf. Roughly 75 percent of all operating and capital costs in the annual county budget are to pay for mandated services. Counties have identified potential reforms, repeals, or changes that could reduce costs significantly. Federal and state financial assistance is provided but does not cover the full cost of providing the mandated services and in many situations the amount of aid does not even cover the increases in costs from one year to the next to provide those services. The shifting of costs to the county property tax places an unsustainable burden on local property taxpayers and inhibits the county's ability to provide high quality, essential services. In 2019, the county has budgeted to spend more than $200 million on services that are required by state or federal law, rule or regulation. Of the county's total property tax levy, 74 percent goes to pay for these mandated service costs. County Program Aid (CPA) is provided by the state to help fund state mandated services. While the county received a modest increase in 2018, that amount was less than just the increased costs for five mandated programs, including child protection, out of home placement costs, and MnChoices assessments. In 2019, the county will see a reduction in state aid of roughly $77,000, and we anticipate an even larger reduction in 2020 if new state funds are not provided for county program aid in the 2019 legislative session. Washington County strives to provide services in a highly effective and efficient manner. The county has the second lowest operating costs per capita of the seven metropolitan counties and the third lowest levy per capita. The county has the lowest human services administrative costs per capita of all Minnesota counties and one of the lowest county tax rates. The county holds the highest credit rating (AAA) from both major rating agencies. However, inadequate state resources threaten our ability to continue providing the core functions of county government at a reasonable cost to county taxpayers. Washington County continues to implement service delivery changes in order to minimize costs. However, in recent years, the state has eased its own fiscal problems by shifting certain costs and responsibilities to the counties. A 2017 law change now requires counties to pay 15 percent of the cost of state required assessments and reassessment for the elderly and individuals with developmental disabilities. Law changes in 2015 and 2016 have dramatically increased county costs related to child protection services and the subsequent placement of children outside of the home. In addition, recent law changes require a greater county share for costs at the Minnesota Security Hospital in St. Peter, at Community Behavioral Health Homes (CBHH), and at the Minnesota Sex Offender Program. 9