A budget committee is proposing that Sauk County government increase its use of property taxes by 1.9 percent next year, the maximum allowed under state law.
During a series of actions Tuesday, the Sauk County Board’s Finance Committee approved changes to the county’s proposed 2018 spending plan that resolved weeks of budget haggling.
The committee’s budget proposal will be presented to the full board next week. Supervisors may make further changes before the board adopts a final version of the budget at its November meeting.
State-imposed limits allow Sauk County to collect a maximum of $30.9 million in property taxes next year, an increase of 1.9 percent from this year’s levy. After a series of adjustments Tuesday, the finance committee had worked out a budget that would have resulted in a 2018 property tax levy that was $224,342 under that threshold.
Supervisor Richard Flint of Reedsburg then made a motion to decrease the revenue anticipated from sales tax by $224,342 so that the tax levy could be increased by the same amount, allowing the county to “tax to the max” next year.
Finance Committee Chair Tommy Lee Bychinski, Supervisor Eric Peterson of Prairie du Sac and Sauk County Board Chairman Marty Krueger of Reedsburg voted with Flint in favor of the motion, which was unanimously approved. Finance committee member Kristin White Eagle of Baraboo was absent and excused.
A state law limits property tax increases based on a formula that involves the net increase in new construction within the county during the prior year. If counties don’t use the entire increase they are allowed, a separate formula allows them to carry forward some of that unused increase — but not all of it — to the following year.
Flint said the loss of some unused levy capacity creates an incentive for counties to “use it or lose it” each year. Those that don’t, he said, can find themselves facing budget hardships down the road.
“The fact is, we actually get penalized for responsible governing, and that’s very frustrating,” Flint said.
Sales tax adjustment
Sauk County has collected more than anticipated in sales tax revenue in recent years.
The county budgeted to collect $8 million in 2017, but officials now estimate sales tax revenue will be closer to $8.9 million by year end. In 2016, the county collected about $1.3 million more than the $7.5 million that was budgeted.
Before Tuesday’s adjustments, county administrative officials projected 2018 sales tax revenue of $9 million. That still was less than the $9.2 million that the Wisconsin Taxpayer Alliance has projected the county will receive.
The finance committee’s adjustment knocks the current 2018 sales tax projection down to $8.8 million.
Sauk County Controller Kerry Beghin cautioned that sales tax is difficult to predict because it depends largely on factors beyond the county’s control, and that’s why the county traditionally has budgeted conservatively for that revenue.
“Is it going to be a good summer in the Dells next year?” Beghin asked rhetorically during Tuesday’s meeting.
Nursing home planning
Going into Tuesday’s meeting, weeks of budget adjustments had left the finance committee with a property tax levy that was above the state-imposed limit.
In order to close the gap, the committee voted unanimously to use reserve funds – rather than tax levy – to pay for $485,000 in study and design expenses related to the possible expansion of the county’s long-term care campus in Reedsburg.
About $35,000 of that would fund a study to determine how the campus – which currently is home to the Sauk County Health Care Center, a government-run nursing home – should be expanded. The remaining $450,000 could be used for design of whatever type of expansion is recommended.
Health Care Center Administrator Jennifer Vosen said Tuesday that prior study has suggested a need for an assisted living facility. That type of operation could generate revenue, she said, that would help offset the tax burden of the nursing home.
Although the county typically uses reserve funds to pay for major one-time expenses, the budget proposal going into Tuesday’s meeting sought tax levy funds for the $485,000 in expenses.
Beghin told the finance committee she was comfortable using reserves to fund the project. The committee approved that change, thereby reducing the tax levy and setting up the scenario that led to Flint’s sales tax adjustment.
The committee is scheduled to meet jointly with the board’s personnel committee this morning to consider two new position requests, including a nurse for a program that assists first-time mothers and a patrol sergeant for the sheriff’s department.