State handcuffs Anoka County's budget planning, officials grouse

With next year's Legislature expected to seek $2.6 billion in cuts, revenue increases and transfers of funds, the Anoka County Board admitted Tuesday that a state mandate has made balancing the county budget as confusing as it is difficult.

"We pretty much agreed we could manage the budget, but then got the letter [from the state Department of Finance] saying we can't make any cuts without being penalized," said County Board Chairman Dennis Berg.

The tax bill that Gov. Tim Pawlenty signed this year limits how much local governments can raise property taxes. But it also released counties from various state mandates to spend certain amounts on specific programs.

County officials are now complaining about a side deal Pawlenty made with top DFL legislators.

The deal canceled out one provision in the bill that would have freed counties from locked-in spending levels for certain service offerings.

County boards throughout Minnesota were ordered in a May 30 letter to manage their budgets in anticipation of the repeal of the provision. "Governor Pawlenty, legislative leaders and tax committee chairs have agreed that this provision will be repealed, retroactive to its date of enactment, in the early days of the 2009 legislative session," the letter from the Department of Finance reads.

Legislative leaders will also need to balance the state's budget while coming up with an additional $500 million to restore the budget reserve. Nearly $100 million more is needed for a one-time increase in general education aid, authorized for next year.

"And the state has more or less told the counties that when looking at those financial mandates, don't you ever think of cutting these expenditures."

For Anoka County, those include $6.4 million for libraries, $4.8 million for mental health care, $575,000 for chemical dependency treatment and $113,000 for child care, Carlson said. Those are required minimum expenditures for the county.

"With Anoka County building two new facilities" -- a regional forensic lab and new medical examiner's office and morgue -- "both of which serve multiple entities, the county has some major new operating costs to cover and reason for concern," Carlson said.

"The county's doing all the right things," Carlson said, "but the state has put the board in a bind."

Berg said the letter from the Department of Finance said the county would be held responsible for all cuts -- cuts, he said, that would make voters angry. He said the county has been left feeling that it will violate the state's mandate if it makes cuts -- and if it doesn't.