This underscores to me how lean we've made the county over the years.”

Dakota County Manager Heidi Welsch

Grim budget forecasts have appeared at Federal, State, and now County levels of government.

On Wednesday, July 23 County Manager Heidi Welsch walked Dakota County Commissioners and staff through the $8.5 million of staff-recommended cuts at the county ranging from vendor contracts to programing to 50 positions.

These cuts highlight shifts from both the federal and state governments putting increased costs on counties, changes District 1 Commissioner Mike Slavik characterized as “partners who sure aren’t feeling like partners.”

Cuts

Proposed levy cuts at the county total $8.422 million, with the majority of those cuts, $5.8 million coming from Community Services. Fifty full-time equivalents (FTE) were proposed to be cut, 25 of which are currently vacant.

Programs proposed to be cut include Driving with Care, New Chance, Thinking for a Change, Communities for a Lifetime, the daycare program through the YMCA and Emergency County Assistance.

The conversation was often clear in how cutting these programs might worsen life in Dakota County.

For example, ending the Emergency County Assistance program—which helps residents resolve urgent needs generally relating to shelter and utilities that not covered by federal or state aid— “would reduce community wellbeing and increase strain on public assistance, housing, crisis response, and partner agencies, as small unmet emergencies risk escalating into large crises,” according to the meeting packet.

The program helped resolve 105 emergencies in 2024 with an average cost of $403 per case.

Ending this program would save $124,387.

Other non-mandated programs in particular faced steep cuts, especially those relating to homelessness.

“We’re leaning a little bit heavy,” on cuts to social service programs relating to homelessness, said Welsch.

Cuts in this area include more than $500,000 in cuts to end or reduce housing contracts, 3.5 FTE and $500,000 for housing programs, and 4.8 FTE and $325,000 for Community Living Programs (CLS).

Cuts to housing programs would lead to “reduced capacity to meet the needs to adults and families experiencing or at risk of homelessness. Demand for services from residents and stakeholders is already high and insufficient to meet demand,” according to the meeting packet.

Commissioners highlighted 3 FTE of case managers within CLS programs to not be cut.

Other cuts to positions are expected to slow down work in the county across various departments.

“All this work is gonna get done, it’s just gonna get done slower,” said Slavik.

Examples of this type of cut include three FTE in public assistance, a public health administrative specialist, a child foster care licensor, a relative search social worker, and 0.3 FTE for a legal administrative assistant, which is expected to slow down the expungement process related to cannabis: “this will jeopardize the timely processing of expungements and criminal case referrals,” according to the meeting packet.

Of the positions being cut, all staff will have an employment offer from the county at another role, including no salary decreases for staff moving into different positions.

Other cuts were styled as “right-sizing” including $300,000 worth of cuts to unallocated building costs and a $15,000 contract for interior plant care in the main four service centers.

The $200,000 worth of cuts to Environmental Resources were highlighted by Welsch and various commissioners as particularly difficult. These cuts include consultant contracts for recycling market information, plans for wood waste research, school recycling programs, and the groundwater protection project.

“We are snip-snip-snipping, and at what point are we being ineffective,” said Welsch about the Environmental Resources cuts.

Departments with no cuts include the County Board, Veteran Services and Elections.

Levy Increase

Staff recommended an 8-10% levy increase for 2026.

That levy increase would translate to a $59.24 increase in county taxes for a total of $774.33 for the median value home in Dakota County which is valued at $385,000.

This jump in levy comes after more than a decade of relatively slow increases.

Before the Great Recession in 2008, the county had a fairly consistent annual levy increase of 5% which abruptly ended in 2009. Since then, the rate of levy increase has not risen above the 3.5% increase last year with a 20-year average increase of 2.3%.

This rate of levy increases, more than one point below the seven-county metro area of 3.8%, has left Dakota County with the lowest levy in the metro.

“That difference may not seem big […] but over time it has a compounding effect,” said Will Wallo, Dakota County Finance Director.

Staff project levy increases in the coming years to be similar to this year’s proposed increase, with an 11.9% increase projected for 2027 and a 9.8% increase projected for 2028 based on an 8% levy increase in 2026. Those numbers are partially due to decreased federal and state funding in coming years.

Further levy increases above 8% in 2026 would potentially offset future levy increases in 2027 and beyond: “how much proactive levying do you want to do for next year and the year after that?” Said Welsch.

Fund Balance

A key consideration during the conversation of budgets cuts is the falling general fund balance at Dakota County, which has dropped over the past decade.

One of the metrics used to measure the fund is months of general fund operations reserves. This measurement highlights how many months a county would be able to operate only using its general fund balance.

The Minnesota State Auditor recommends 5-6 months of reserve. Currently, Dakota County would be able to operate for 3.03 months.

Board Discussion

Commissioners discussed further cuts to the library system and to the county board’s budget. The Dakota County Library System—which was just named best in the state by the Star Tribune for the second year running—is already set to cut the digital service provider Hoopla which could increase wait times for e-books.

Further cuts to the library system, which might include reduced operating hours, were decided against in part because libraries serve as hubs for various county programming from public health to social services: “these are economic development centers,” said Tom Novak, Director of the Dakota County Public Services and Revenue.

Many of the commissioners assigned blame for these cuts to decreased funding at the State and Federal Level, in particular referencing SNAP cuts and increased administrative duties for medical assistance work requirements from the Big Beautiful Bill signed by President Trump on July 4.

“We are already behind so when we double what we have to do […] we would be double behind,” said Welsch about the increased administrative duties tied to medical assistance work requirements.

“If we’re gonna rip the Federal government, we should rip the state as well,” said District 5 Commissioner Liz Workman, referencing various shifts from state funding down onto counties.

District 6 Commissioner Mary Liz Hoberg was more hesitant to play the blame game citing the expansion of permanent positions at the county using short-term funds: “we need to be careful assigning blame to other entities.”

The board will vote on the 2026 budget in December. In regard to inquiries on some of the staff-recommended cuts proposed at the meeting, Dakota County provided the following statement:

“Dakota County, like many local governments, is navigating financial impacts from inflationary increases, state and federal government cost shifts and new service mandates. While we continue to assess the full impact of these changes, we want to assure residents and staff that no layoffs are planned as part of our response.

“The county’s 2025 budget is still in development, and the Board of Commissioners will not approve a final budget until December. As such, there are no updates on specific program adjustments or funding allocations at this time.

Our goal remains clear: to maintain high-quality services and meet the needs of our growing county while remaining fiscally responsible. As always, Dakota County will continue to prioritize transparency, stability, and service to our residents as we finalize the path forward.”