Ramsey County leaders are dropping their proposed 2021 property tax levy increase from 4.5% to zero in response to the financial fallout from the COVID-19 pandemic and civil unrest following the death of George Floyd.
The 2021 spending plan, released a year ago in more prosperous times as the second year of the county’s biennial budget, had called for a 4.5% increase in the levy. County Manager Ryan O’Connor presented the revised budget at Tuesday’s board meeting.
“The health and economic impacts from the coronavirus are the greatest in any of our lifetimes,” he said. The civil unrest following Floyd’s death in the custody of Minneapolis police also was a factor in adjusting the budget, he said.
To close the funding gap left with no levy increase, county officials propose trimming about $20 million from the proposed budget, tapping some reserve funds, delaying some hiring and putting some technology and equipment upgrades on hold, O’Connor said.
However, he added, no furloughs or layoffs are being proposed for this year or next.
Commissioners expressed preliminary support for maintaining the same tax levy next year.
“We needed to definitely make some adjustments, especially when it comes to the property tax increase,” said Commissioner Jim McDonough.
The County Board voted last December, when the economy was still booming, to raise this year’s property tax levy by 4.75% to $333.6 million.
The size of the revised budget for 2021 is now around $747.5 million, down from the original proposal of $763 million. About 44% of the budget, or $326 million, would come from property taxes, with the remainder coming from state and federal dollars, reserves and fees charged for services.
“It really is responsive of what we are seeing right now in our community and the needs in our community,” said Comissioner Trista MatasCastillo.
O’Connor said the county will stayed focused on its long-range goals including racial equity, community engagement, putting residents first, retaining talented employees and transforming systems to meet those goals.
“We will find ways to adjust our budget without impacting this work,” he said. “We knew that we had to do this work to build a more inclusive and equitable community. We had to do this work to build a community in which all are valued and thrive.”
O’Connor said the revised budget protects areas needed most for “an effective pandemic and economic response,” including the Public Health Department and financial assistance.
Nearly $9 million for affordable housing also has been earmarked in the budget for next year. Commissioners have repeatedly expressed concern about the lack of affordable housing in the Twin Cities.
County officials will hold virtual public hearings on the 2021 budget on Sept. 10 and Nov. 30. The County Board is scheduled to vote on the budget on Dec. 15.