Counties advance plan for local control, state savings

Proposal touts $1 billion in cost cuts for state

Minnesota’s whopping structural budget deficit has spawned a number of proposals for retooling government to reduce costs, but few of the plans to emerge so far are as expansive as the one released a few days ago by the Association of Minnesota Counties (AMC).

Under the terms of its Minnesota Redesign plan, AMC wants to detach counties from the tether of state government funding, and to free county commissioners from the mandates imposed by state lawmakers. The potential general fund impact of the plan - $1 billion in biennial state savings - has state legislators’ ears pricking up.

Jim Mulder, AMC’s executive director, is taking his organization’s pitch to the Capitol with the message that the steep decline in state revenues will make state mandates unaffordable in the years ahead.

The plan would jettison state program aid to counties and replace it with a system that allows counties to impose local sales taxes generating an estimated $640 million per biennium. At the same time, the plan would revamp several county services - including road maintenance, courts and zoning - in a way that would take millions of dollars off the state’s ledger of general fund expenditures.

Mulder, who is leaving his post March 12 to focus on writing a doctoral dissertation about the impact of state mandates on local governments, implored lawmakers to free counties from costly state mandates so that counties can find cheaper ways to provide services.

“It’s the unshackling of all of the process mandates that we place on everybody,” Mulder said. “Take those off and give us performance mandates.”

The Minnesota Redesign won plaudits Wednesday from Republican and DFL members of the state House Property Tax and Local Sales Tax Division. Mulder urged committee members to steer the discussion away from the perennial fiscal trap of spending cuts versus tax increases that divides Republicans and DFLers.

“If we allow this debate to be a debate about whether we raise revenue or cut services, we will fail,” Mulder said.

But partisanship isn’t the only problem. Some County Board commissioners oppose key components of the plan.

Washington County Commissioner Lisa Weik, of Woodbury, said she agrees lawmakers should give counties more freedom to decide how and which services to provide. But she thinks the sales tax proposal won’t fly.

“I think that will derail a lot of the conversation,” said Weik, a former regulators affairs specialist for Medtronic who is serving her first term on the County Board.

The Minnesota Redesign has 10 components:

• Reduce the state highway patrol’s size by 50 percent and redirect services like road patrol and accident reconstruction to counties and cities. State savings: $75 million per biennium.

• Give counties responsibilities for maintaining and plowing all state highways except freeways. State savings: at least $200 million per biennium.
• Eliminate county program aid and create a half-cent county sales tax. Counties would be able to opt out of imposing the tax and a portion of the tax would be deposited into a disparities pool that would be used to “equalize” the revenue from richer communities with the poorer communities. State savings: $640 million per biennium.
• Reduce the three state probation systems to one system. Allow counties to create joint powers districts for community corrections. Net state savings: $20 million per biennium after an $80 million cost is factored in.
• Court reforms such as allowing a county magistrate or hearing officer to handle certain civil or minor offenses in each county. State savings: $20 million.
• Allow counties to design chemical dependency response districts.
• Enact a statewide zoning law that combines the best portions of city/town planning with county planning and zoning.
• Suspend all maintenance of effort [MOE] requirements for three years. AMC also wants a moratorium on new state mandates and a five-year sunset review on all existing mandates.
• Hold off on state agency directives like new state rules or commissioner orders unless they are subject to federal rule making or required for conformity with federal law.
• Allow counties to organize as home-rule charters. The change would allow counties to do anything that isn’t prohibited by the state. Currently, counties are subject to the so-called Dillon rule that forbids counties from doing things they aren’t expressly empowered to do by the state.

That last point is especially appealing to County Board commissioners. Weik said that 80 percent of her county’s responsibilities are derived from state-imposed requirements under the Dillon rule.

“If I could have one thing, it would be number 10,” Weik said.

Mulder told the committee that counties could operate more efficiently if their responsibilities weren’t dictated by the state to such a large degree.

“We believe that self-organization is the most important thing we can do today,” Mulder said.

For example, counties aren’t allowed to implement burning bans when fire danger is high. That authority resides with the state Department of Natural Resources.

But some legislators are concerned that cities might feel the brunt of increased county authority.

“How do you keep counties from stepping on cities’ toes?” said Rep. Morrie Lanning, R-Moorhead, who was formerly his city’s mayor.

Mulder responded that the home-rule charter “doesn’t give the county the ability to supersede the city.” Mulder also said the home-rule idea would make it easier for counties and cities to share services based on their local needs.

Mulder said that some aspects of the 10-point proposal could be passed into law this session.

Some observers, however, think the Minnesota Redesign needs more specifics.

Jim Franklin, the executive director of the Minnesota Sheriffs Association, said many of the Minnesota Redesign proposals have implications that would be very difficult to work out.

For example, Franklin said moving to a single probation system could be very difficult for some counties.

“We do have three different probation systems. I think the purpose of what I saw in the [Minnesota Redesign] is to get on the same page where we have a single system. [What] that would require [depends] on what system you chose or if you did a hybrid. Some counties might have to change a lot of things, others would change nothing,” Franklin said.

Questions of implementation, Franklin said, make the Minnesota Redesign too ambitious to be ironed out in the current session.

“I think it was the intent of the AMC to put it out there. But there is a lot of detail to work out before these ideas become workable,” Franklin said.

The state’s ongoing budget crisis will force lawmakers to agree on reforms sooner rather than later, said Property Tax Division Chairman Paul Marquart, DFL-Dilworth, who praised the AMC’s proposals.

“The revenues are not going to be there in the future,” said Marquart. “We simply can’t continue to cut and hurt services.”