County leaders angered over elements of proposed state budget

After a discussion regarding a proposed future state budget which included the words “horrific,” “stark,” and “out of control,” all five members of the Waseca County Board of Commissioners expressed enthusiasm for placing their signatures on a letter addressed to Minnesota Governor Tim Walz protesting the impact state funding shifts would have on smaller governments and property owners.

One way to summarize their shared observations is that state leaders are creating artificial “reductions” in their 2026-27 and 2027-28 budget plans by insisting that local governments begin paying costs for programs and initiatives the state is imposing on them. Not only is the state looking at withdrawing financial support from programs it created and has previously taken fiscal responsibility for, it is continuing to expect implementation of new programs enacted within the past few years.

Information shared by county administrator Michael Johnson calls attention to county budget-setting and funding efforts which have made it possible for the county to increase its levy funding by less than 8 percent since 2020, even though the consumer price index has risen about 21 percent in that time.

During their May 6 discussion, county leaders speculated proposed cost shifts could lead to a future 5 percent increase in the county tax levy, “undoing” their work at keeping the levy low.

Of the shifts, Commissioner De Malterer stated “These are things the state has taken care of because they result from state mandates.” She went on to say some county leaders statewide feel as if they are “looking over a cliff” which may lead to as much as a 17-percent increase to their levies.

With the current legislative session nearly over, county leaders predicted there will be a special session to continue work on state budget planning. They expressed hope state leaders will respond to input they, and many others who speak for county governments, are sharing.

A draft of the letter commissioners will be sending mentions the state’s intent to decrease its expenditures by more than $800 million, then goes on to say, “While we applaud efforts to reduce budgetary expenditures, it should be done responsibly through the reduction of mandated programs,” rather than “placing additional tax burdens on rural counties.”

After a historic $17.5 billion “surplus” early in the decade, state legislators founded new departments and created numerous new programs which, according to economist Martha Njolomole, led to ongoing “baseline” budget increases of about a billion dollars a year.

As state leaders work on future budgets, they are looking in close detail at those for 2026-27 and 2027-28, while also keeping their eyes on income and spending projections which go into the next decade. Those projections indicate future budget shortfalls are likely.

In Minnesota, income and sales taxes form the foundation for funding statewide government operations, while local entities including counties, cities and townships have property tax as their main source.