Hennepin County Proposes to Cut 127 Jobs

Hennepin County Administrator Richard P. Johnson proposed a 2012 budget to the Board of Commissioners last week of $1.559 billion, which is 3.13 percent–or $50 million–less than this year.

This is the third year in a row where no increase in property taxes for operations is proposed. The net property tax levy for the proposed budget is $668.4 million, a decrease of approximately $1 million when compared to this year’s level.

The operating budget totals $1.4 billion, a decrease of $7.3 million when adjusted for the increase in legislatively mandated intergovernmental transfers to Hennepin County Medical Center. 

The capital budget is $118.6 million, which is $61.6 million less than in 2011. 
Johnson’s proposal cuts 127 positions, a trend that since 2008 has seen staffing reduced by a total of 490 positions, or 6.3-percent of the workforce.

In another measure to save costs, Johnson called for closing the Eden Prairie Service Center in the first quarter of next year. He said there has been a decline in transactions and revenue for the county’s seven service centers. Johnson told the commissioners they had made prudent decisions about spending priorities as the county sustained significant reductions in state funding in recent years. But it has become more challenging to shield the public from painful service cuts.

“For all the talk about taxes, there is little talk about what each resident receives for what they pay," Johnson said. "There seems to be this misperception that the problem is always on the revenue side, but all services will continue as usual.”

"We are keenly aware that our residents are under stress from the economy,” Johnson said, pointing to a steep increase in basic-needs programs such as Food Support. In July 2011, Hennepin had more than 129,000 residents receiving Food Support compared to July 2008, when the county had 81,000 enrollees.

“We are reducing staffing even as caseloads and other responsibilities increase,” Johnson said. This illustrates the continued financial challenges facing the county as it tries to meet service needs, Johnson said, and emphasizes the importance of innovation to improve productivity and efficiency in keeping costs down.  

“Hennepin County,” he noted, “has a tradition of providing value to its residents.” He said that value is demonstrated by Hennepin’s longstanding triple-A credit rating, numerous awards for innovation from the National Association of Counties, and the good work of county employees.

Planning for the 2012 budget began during the state shutdown when county officials tried to predict and react to funding shifts from the state. It is estimated the county could lose $33 million in state revenues in 2011 and another $20 million in 2012 as a result of changes made to the state budget. 

However, most of the funding losses relate to two discretionary revenue sources: County Program Aid, which is reduced by $11 million in 2011 and 2012, and the Market Value Program, which will see a reduction of $13 million in 2011 with complete elimination of state funding for the program for 2012.

Many Hennepin property owners in 2012 will see a rise in taxes due to the State Legislature’s change in funding the Market Value Program. This program provides property tax relief to lower-valued homes. In previous years it was funded by the state. Starting in 2012 the program will be funded by higher-valued homes and commercial, industrial and apartment properties. 

The impact will be quite diverse throughout the county. Homeowners with homes of $183,000 or less will likely benefit from the Market Value Program change, whereas homeowners with homes valued at more than $183,000 (and other nonresidential property) will likely see increased property taxes of varying amounts.

The first public hearing on the proposed budget is for Public Works on Oct. 5 at 1 p.m. in the County Board Room, 24th Floor, at the Hennepin County Government Center in downtown Minneapolis. Visit the county's website for a complete list of budget hearings.