Property taxes may go up 3 percent to cover HCMC shortfall

For 2010, a year in which county tax assistance will deliver two new suburban libraries and the Twins' new open-air ballpark, Hennepin County is considering a reduced budget to hold down spending in the face of the weak economy.

County Administrator Richard Johnson presented a $1.6 billion budget Tuesday to the county board for next year, down about 6 percent from this year's $1.71 billion.

But even after cutting 163 jobs and reducing capital improvements, the county still needs to raise property taxes by 3 percent solely to pay increased costs at Hennepin County Medical Center, Johnson said.

Those higher costs were caused by the state's cancellation of General Medical Assistance for poor adults, he said.

Hearing that, county commissioners began their budget deliberations by blasting Gov. Tim Pawlenty again for shifting the state's budget problems to them. The county estimates that 40 percent of the state's poor adults who were covered by General Medical Assistance live in Hennepin County.

The tax increase is required "just because the governor cut the legs out" from under thousands of low-income adults who depended on General Medical Assistance, Commissioner Gail Dorfman said.

Commissioner Peter McLaughlin said that "people need to understand that the county doesn't operate in a vacuum."

While the county is doing its part by cutting staff and putting off improvements, McLaughlin said, state government is giving counties and cities less money.

Rather than raising state taxes, Pawlenty is "balancing the state budget on the backs of property taxpayers in counties and cities," McLaughlin said.

"The General Assistance Medical Care cut is the biggest example for us," he said. Pawlenty shifted those health care costs to the counties "at the same time he is opposed to national health care reform."

Board Chair Mike Opat said residents may wonder "how can the property tax budget go up" in such economic times. But, Opat said, the county pays $43 million a year to provide health care for people who are poor and uninsured. The 3 percent tax increase proposed in the budget would bring in only $18 million toward that problem, he said.

The board will adopt a budget in December after three months of public hearings. The first hearing is scheduled for Oct. 8 at 1 p.m. in the board room at the Hennepin County Government Center.

"The proposed 2010 budget is predicated on expectations that the economic picture will not be significantly brighter in the near future," Johnson said in his budget message.

"We anticipate foreclosures and economic instability will continue into 2010 and 2011 and, while the national economy may be starting to improve, state and local governments will trail this improvement in terms of improved tax revenues and stabilized tax base."