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Pawlenty's payment-in-lieu-of-taxes proposal would leave county $320,000 short

Proposed cuts to a state program that aids counties with large amounts of public lands may leave Beltrami County coffers $320,000 short.

Payment-in-lieu-of-taxes, intended to help counties that have a large amount of state-owed land, would be funded at 80 percent under Gov. Tim Pawlenty's proposed budget.

"Because state-owned land does not pay local property taxes, delivering even basic level services to that state-owned land can be financially difficult for local governments," according to the governor's budget for PILT.

Beltrami County commissioners will discuss the PILT program and proposed cuts during their regular 5 p.m. meeting Tuesday at the County Administration Building.

The 20 percent cut would mean $320,578 fewer dollars for Beltrami County, which received $1.6 million in PILT funds for 2008, says County Auditor-Treasurer Kay Mack, who adds that the monies are used to offset the county's property tax levy.

"The majority of PILT funding received by the county is allocated between the road and bridge fund (for county road program), Capital Improvement Fund (for future and unanticipated facility or equipment needs) and the revenue fund," Mack said in a memo.

"Counties maintain that state cuts to PILT funding are inappropriate due to the fact that the impact is felt disproportionately throughout the state (because) rural counties have more tax-exempt property and rely on PILT more than urban or metro counties," she wrote.

Beltrami County has 716,360 acres in the PILT program with the total gross PILT payment figured from 2007 property tax levies payable in 2008 of $2 million. A 20 percent cut of all funds amounts to $405,101 and is 12 percent of the county's property tax levy of $17.3 million.

The additional impact comes to Red Lake Game Fund, forfeited tax monies and to a towns and cities fund that get PILT funds.

For 2008, the county allocated $900,000 to the road and bridge fund, which is used to convert three-digit county gravel roads to roads with bituminous surfaces, Mack said. Since 2004, $3.5 million in PILT was allocated.

Also, $280,000 was allocated in 2008 for the Capital Improvement Fund, which has received $1.4 million since 2004. And, the general revenue fund got $422,892 in 2008.

According to the governor's budget, PILT payment obligations have grown over the last several years, and they are expected to keep growing. The current forecast base is $21.79 million in fiscal 2010 and $21.9 million in fiscal 2011.

"The governor is proposing to modify the PILT payment formula to provide 80 percent of funding currently forecast," says the budget proposal. It notes that the reduction will not affect state Department of Natural Resources operations, through which PILT funds flow, "but is a reduction in payments to counties."

The reduction is to help manage the cost of the growing PILT program, it states.

Commissioners will be asked to review the current PILT allocation strategy and to discuss legislative and budget responses to the proposed state cuts.

Also during the regular meeting, commissioners will be asked to designate reserve funds for specific future needs. As of Dec. 31, designated funds included $9.3 million for the revenue fund, $922,502 for road and bridge, $2.4 million for human services, $812,376 for the County Nursing Service, $641,665 for the Natural Resource Management Department and $44,300 for the solid waste program.

The board, during its 3 p.m. work session, will receive a legislative update via conference call from Sen. Mary Olson, DFL-Bemidji, and consider a resolution supporting legislation that would allow public employees who are at least 62 and eligible to receive a public pension to retire and draw pension and still work up to 1,044 hours per year.

"This would allow Beltrami County to retain talent and reduce salary and benefit expenses," according to a memo to commissioners.

They will also consider a Health and Human Services Department proposal for a pilot project to adopt the outcome-based delivery of services to Minnesota Family Investment Program recipients and receive a presentation on a public awareness campaign for the Wetland Conservation Ordinance.

"Due to the number of wetland violations being discovered in Beltrami County, the county is initiating a new public awareness campaign about the wetland program," Environmental Services Director Bill Patnaude said in a memo.

The County Board's consent agenda includes payment of county bills and warrant payment listing, approval of fire protection agreements for Big Grass and Northwood unorganized townships and approval of a contract amendment resolution for a cultural resources/archeological investigation at a proposed multiple-use shelter site in Three Island County Park.

Commissioners will also consider approval of the resolution in support of the pension legislation they discussed earlier, as well as the contracts to implement the HHS proposal for outcome-based service delivery to MFIP recipients.

The consent agenda includes authorization to the Sheriff's Department to allow staff to attend out-of-state training and approval of a resolution authorizing Bi-County Community Action Program to apply for Family Homelessness Prevention and Assistance Program funding.

HHS will ask for approval of Minnesota Counties Computer Cooperative contracts, approval of a host of county contracts for the 2009 calendar year, approval of monthly bills, and present routing reports and licensing requests to commissioners.