$5 million payback to utilities looms

The latest news regarding Minnesota property tax assessments was good for Enbridge and other utility companies and fairly dire for local governments, who find themselves on the hook for many years’ worth of past overpayments.

Carlton County is no exception, with the total payback estimated at close to $5 million after the Minnesota Tax Court ruled that past tax assessments were too high on state utilities and pipelines.

With that in mind, the Carlton County Board of Commissioners scrambled at their meeting Tuesday to formally support state legislative action to have the State cover the overpayment of tax collections, because it was the state that set the assessments on the utility companies. Board chair Tom Proulx will sign the letter in time for a legislative hearing Friday.

Carlton County assessor Kyle Holmes is one of several county officials around the state who will address the issue at the legislative hearing Friday. By law, it is the state that sets assessments on utilities and pipelines. County assessors have no say in the amount to be assessed on these types of businesses, and get directives from the state.

“I just literally got this information late this afternoon,” Holmes said of the plan to ask the state to cover the overpayments. “The State has not approved a payment to cover the whole bill for other tax court decisions on this issue. This time the pain is spread throughout the state and it looks like bipartisan support has a chance of approving the total payment of the money owed to the utilities.”

What is the exposure locally? The settlement of what is called “state assessed payback” has the potential to reach $5 million for Carlton County. The county would have to pay 47 percent of that figure, school districts of Carlton and Wrenshall to pay 10 percent, townships such as Perch Lake and Silver Brook are on the hook for 12.5 percent — which would be more than they get in tax revenues in a given year — and the special taxing districts are at 2 percent. The remainder of about 30 percent is paid by the state.

Affected townships and schools can be hurt by this payback, but all the property owners of Carlton County will feel the impact. Figures are not yet final, but $2,350,000 may have to come out of Carlton County reserves, according to Holmes. More importantly, the Tax Court ruling lowers the assessed evaluation of the utilities and pipelines in the future, so that tax base must be made up by Carlton County property owners throughout the county. School districts, townships, and special taxing districts are similarly affected.

In other county news:

• Longtime county employee Kevin DeVriendt has been recommended to be the new auditor/ treasurer, replacing Kathy Korteum. Final board approval will not take place until the May 11 regular session of the county board, which is still debating his salary. The discussion centered around at what step to start the new auditor/treasurer, which could range from $90,000 to $122,000, depending on the board decision. Retiring auditor/treasurer Kathy Korteum said she started in 2020, working out of class for her one-year probation period and then was at step 7. She said outside candidates who were hired were given a higher salary step than those hired from within the ranks.

• Commissioner Mark Thell said he was not comfortable making a decision on the auditor/treasurer salary until the absent commissioner Dick Brenner would be present at the May 11 board meeting. No decision was made at this time.

• Carlton County IT director Peter Gould reported that livestreaming of covered meetings could see 300-plus participants listening in and at times the number has risen to about 900. Gould asked for an increase of staffing due to the heavy workload. It was recommended the 6.2 staff be increased to 7 staff for the remainder of this budget year depending on board approval.

• County engineer Jin Yeene Neumann reported that the work on the north end of 14th Street will start Monday, June 7. Work will start in June for a full depth reclamation from Pinewood Drive west to County Road 4, and CSAH 5 for a mill and overlay will start in July. Since bids for road work have come in below engineering estimates, the Carlton County Highway Department will call for bids on the south end of the 14th Street project in July for work to take place in 2022.