Dakota County has been held up as a shining example of frugality by Minnesota Revenue Commissioner Myron Frans.
The county is one of seven in the state that will collect less in property taxes in 2014 than it did in 2013. On Dec. 17, Dakota is set to adopt a $128.5 million 2014 levy — down $646,000 from the 2013 levy — without cutting services.
Frans is flying around the state making stops in selected cities and counties to thank them for making the intended use of extra money Gov. Mark Dayton and legislators provided for next year. He's handing out hammers to officials to symbolize their effort to "nail down property taxes," Frans said.
Cities will receive $80 million more in local government aid, for a total of $508 million in 2014. Counties will receive $40 million more in county program aid, for a total of $206 million in 2014. Eliminating the state sales tax on goods purchased by cities and counties will save local governments $129 million.
Statewide, 93 of the 853 cities reduced their preliminary levies, 223 held them flat and 537 increased their levy. Of the 87 counties, seven reduced their levies, 13 held them flat and 67 increased them.
Frans said he knows that many governments applied the extra money to their wish lists of delayed capital improvements.
"I get the wish list idea, but there is also a wish list for people who pay property taxes, and that is for them to go down," Frans said. In the past 10 years, property taxes have gone up while local government aid has been reduced. By providing local governments more state aid, "We want to see property taxes go down,'' Frans said. "Property taxes are the most regressive tax."
Cities and counties have until the end of the year to certify their levies, and Frans said he is still hoping to see more come down.
Dakota County Administrator Brandt Richardson said he appreciates the sales tax relief and the additional aid the county received.
"We paid sales taxes on election ballots," Richardson said. "How much sense does that make?"
The windfall of money from the state contributed to the county's ability to collect less in taxes in 2014 without cutting services, but other strategies have been in place for years that have made Dakota County's annual tax levy the lowest of the metro counties, he said.
The county strives for low taxing year in and year out, Richardson said. "It's about consistency of purpose."
Dakota employs the fewest full-time employees of all the metro counties, Richardson said. He hires people only if they demonstrate a commitment to holding costs down, and then as they do their jobs they are constantly reminded to ask, "Do we really have to spend money on this?" Richardson said. In that way, county employee transportation costs for trips and travel were reduced by $300,000, he said.
Richardson said he thinks of tax time as a passing of the hat in the county. "We should all feel privileged to spend" the money that comes in and to get taxpayers as much value for the dollar as possible, he said. "The county taxpayer should not be viewed as an open pocket to accomplish whatever."
Other strategies also have paid off for the county in holding taxes steady, said Deputy Administrator Matt Smith.
Three years ago, the county became a self-insurer for health insurance. "We have been able to keep our health insurances costs flat for three years," Smith said.
County employees also have been encouraged to improve their health to hold claims down. "Look around the room and what you are looking at is our own mutual health care company," Smith said.
County revenue from property-related fees has been rising, investment income has brought in an extra $1 million, and the county has been able to retire some debt early, saving some interest payments, Smith said.
All of it contributed to a year when the county can "have our cake and eat it too," reducing taxes without reducing services, Smith said.