County governments serve a unique role in the infrastructure of South Dakota local government. Where the State is the body, counties serve as the arms and legs carrying out a number of directives mandated by the State. Counties are required to issue important documents like birth certificates, marriage certificates, and death certificates, walking in stride with our citizens throughout significant landmarks of their lives. These services are vital but they come with a cost. In fiscal year 2023, 88% of the county’s budgeted general fund expenses were driven by providing services the state requires counties to fund. In Minnehaha County, our most significant focus and expense comes from public safety. Nearly 70% of County expenses are driven by public safety, which includes law enforcement, courts, and legal.
Property taxes are the primary source of revenue for Minnehaha County. When you pay your property taxes, Minnehaha County has the unenviable responsibility of being the organization that you write your check to. However, a small portion of that check actually stays with the County. The majority of your property tax payment, typically around 80%, is sent out to the school districts, cities, townships, and various other taxing entities. State law limits the amount of increase in property taxes to either 3 percent or the Consumer Price Index, whichever is less. In an economic environment that is consistently feeling the pressures of 6 percent inflation, it is a challenge for county revenue to keep up with expenses.
Recognizing that Minnehaha County is limited in revenue opportunities and obligated to pay certain expenses, Minnehaha County assembled a Financial Action Network (FAN) in 2017 to consider these unique challenges. This group consisted of a number of business, accounting, and finance professionals who gave guidance to the Commission on financial preparation for the next five years. In December 2022, the Commission restarted the FAN with the same mission, help Minnehaha position itself to be financially successful for the next five years.
The FAN has created a final report for the Commission outlining their recommendations for the county. These recommendations range from strategic budgeting using a five-year forecast to continuing to think creatively about solving problems in the most efficient and economical way.
I’m thankful this group was able to meet and provide their valuable time to helping our County. Their recommendations will be an important resource as we craft budgets over the next five years.
