County 2011 budget plans filled with uncertainties
Health insurance costs key issue
by Laura Adelmann
Thisweek Newspapers
Dakota County commissioners are grappling with many unknowns in setting the 2011 budget.
Among the challenges commissioners discussed in an Aug. 24 budget work session: falling property values, the governor’s race, anticipated state funding losses and economic trends.
While many factors are still unknown, county officials are considering raising the property tax 1 percent in 2011, which would equate to a property tax cut on the county portion of most property tax bills due to falling property values.
In both 2012 and 2013, commissioners are considering 2 percent levy increases.
Commissioners also talked about raising the 2011 Regional Rail levy 38 percent.
Although the percentage increase sounds significant, the result on a median-value home, which for 2011 is $206,100, would increase $2.35 per year, going from $5.69 per year to $8.04 annually.
The funds would help pay for continued transit improvements along Cedar Avenue and the Robert Street corridor.
But much of the budget discussion centered on the county’s rising health insurance premiums.
Without any change to the county’s base health insurance plan, the organization’s insurance costs will increase $1.8 million in 2011, the equivalent of 21 jobs, said Communications Director Gail Plewacki.
Already, county department directors have cut spending and left positions unfilled, planning on a budget that is $10.6 million below the 2010 level of $368 million.
By 2013, the county expects the budget to drop below 2010 levels by another $55 million.
But as county commissioners have concentrated on the likelihood of layoffs next year, union representatives are concerned about the county’s proposed change to its health care coverage to avoid a $1.8 million premium increase in 2011.
Under a new health plan, employees would have three free medical visits and pay a higher deductible than under its previous plan.
The proposed plan, “Three for Free,” includes an individual out-of-pocket limit of $2,000 and $4,000 maximum for any size family.
Commissioners said some county employees have pleaded with them for the county insurance plan to remain unchanged because of ongoing health issues.
Their concerns prompted the county administration to address a letter to employees, warning that if the county doesn’t change its plan, health insurance could become an unaffordable benefit.
Historically, the county has proven more expensive to insure, and recently claims outpaced premiums.
That record makes it challenging for the county to receive competitive bids for insurance.
In the letter to employees, county administration explained it’s facing “a perfect storm of budget pressures.”
The letter explains, “state aid to counties is steadily shrinking. Investment revenues are down significantly. A variety of costs are increasing, including the county’s contribution to the pension plan for employees. Raising property taxes simply cannot begin to address all of these challenges.”
During the workshop, commissioners urged negotiators to help union officials understand the county’s predicament and agree to the insurance plan.
The county will set its maximum levy at the Sept. 14 board meeting, and will adopt a final budget Dec. 14.
Laura Adelmann is at dceditor@frontiernet.net.
