The county board will finalize the 2003 levy and budget at their next board meeting on December 15. Taxpayers concerned about the tax hike attended the Truth in Taxation meeting on Thursday.

The levy will increase by 28.4 percent from $8,688,703 to $11,160,539, which will be spread out over 22,000 taxable properties throughout the county.

The unprecedented growth reflects $2,125,000 annual installment for the $26.3 million bond the county has issued for the courthouse project. The debt payment is outside the levy limit set by the state.

One question addressed to the board was if the tax increase would be repeated over the years during the 20-year period of bond repayment.

As far as the courthouse construction is concerned, the answer is no, according to county officials. The $2,125,000 annual installment is basically fixed. So, it will not further push up the levy in the years following 2003.

But, of course there are other factors that may increase the future levy.

Commissioner Dan Belshan warned that there may be an increase in the staffing cost for the expanded jail. He pointed out that the county will have to hire 11 additional jailers, which can be translated into a $500,000 increase in the levy.

The anticipated cut in the state aid, from which the county receives about $1.7 million annually, is another issue. The board has set aside items that can be postponed or eliminated from the 2003 budget in case the state aid is reduced. But, if the reduction amount becomes larger than expected or lasts over many years, the levy would have to be increased.

The upcoming budget will increase by 10.7 percent from $29,127,891 to $32,238,982.

The budget is balanced. The $2,125,000 debt service is not accounted as an expenditure. Instead, the amount is noted as revenue, which will cover excess expenditures in the human services, general fund, highway and capital improvement fund.

The accounting magic derives from the $26.3 million the county borrowed. The money is already in the county’s hand. Each year, the county can allocate funds from the money pool to the budget.

The problem is the money will run out before the county can complete the repayment.

The interest rate for the bond is over four percent, while the borrowed money is generating only 1.25 to 2.6 percent interest. Belshan pointed out that the county is losing money by letting it just sit and said it is a waste. At some point in the future, the county will inevitably need to fill the balance difference, he said.

The impact of the levy on property tax rates varies depending on the type of property and assessment value. Some county residents residing within the school district and municipal government boundaries will face a larger increase, according to County Auditor Dennis Distad. In one extreme case the property taxes rose over 400 percent, he said.

Combined with a change in the state tax credit formula for homestead and agriculture property, the reason for increase is specific to each parcel, Distad said.

Those who have questions about their tax statement are still encouraged to make an appointment with the county auditor.