Pennington County property owners could see about a 6 percent increase in their county property tax rates next year, according to preliminary budget figures.

County officials are also considering imposing a wheel tax on vehicle owners.

The Pennington County Commission will begin consideration of its 2009 budget, as well as a wheel tax, at its next meeting on Friday, June 6. The meeting was rescheduled from today so the commission can meet on the same day it holds its official vote canvass from the June 3 election.

The 2009 budget, now at the initial stage after county department heads submitted their budget proposals, totals $67,303,022, up from $64,674,031 for this year, according to county Auditor Julie Pearson.

With a $67.3 million budget, the county's base tax rate, called the mill levy, would rise from $4.57 per $1,000 of assessed valuation this year, to $4.87 for 2009, Pearson said.

That means the county's portion of the property tax on a $100,000 home would be $487 in 2009, up from $457 this year. School districts and cities also levy taxes on property.

However, Pearson cautioned that the county budget totals, as well as the tax rates, could change during the remainder of the budget process. The county commission must adopt a provisional budget by July 31 and a final budget by Sept. 30.

Part of the reason for the higher tax rate is the normal inflationary increase in the budget, including a 2 percent cost of living increase, as well as merit increases, for county employees.

It also includes a cost of more than $150,000 for a new water-quality program the commission approved this spring.

The county also will have to pay more to staff the additional space in the jail annex, which should be finished next year.

The $4.87 per $1,000 property tax rate also includes an increase of the county fairgrounds levy from .07 to .15, or 8 cents per $1,000, to pay $300,000 for grandstand repairs, if the commission approves.

And it includes the addition of a levy of .09, or 9 cents per $1,000, to pay off the loan to finish the jail expansion.

However, even at the 4.87 tax rate, the county commission would have to cut $1 million from the budget if it wants to increase its budget cash reserves to 20 percent of its total budget from the current 17.65 percent, Pearson said. Commission members earlier indicated they want to raise the cash reserve, which is available for periods of low cash flow.

Pearson said the final figures also could be affected by commission decisions on how much to put in other budget reserves, including those for county equipment, for drainage projects and for catastrophic medical costs the county must bear for indigent people.

Another factor in next year's budget is the loss of $612,000 in federal forest funds that were stripped from legislation last winter in Congress. The money has been allocated to compensate counties and school districts for the loss of revenue due to the decline in timber harvests on federal lands in recent years. It is used for county roads and bridges.

The budget, as it stands now, also assumes the county will receive $450,000 in federal payment in lieu of taxes - commonly called PILT - money that the government reimburses counties for the presence of federal lands (such as national forests), which yield no property tax revenue. However, Congress still hasn't approved the PILT money for 2009, Pearson noted.

Last year, the county commission cut $3 million from the proposed budget, partly so it could put $1 million into an accumulated building fund.

Last year, the county cut or reduced funds for roads and bridges, for catastrophic hospital expenses, nursing services and economic development.

Pearson said the commission could cut next year's budget even further if it wants to reduce the tax levy. Besides the 4.87 base rate, called the county consolidated levy, some county residents also are taxed for services such as those provided by fire and unorganized road districts.

Pearson noted that the county is required by law to provide certain services, including big-ticket items such as roads, law enforcement, the jail and space for the state court system.

County Highway Department Superintendent Hiene Junge will discuss a possible county wheel tax imposed on vehicles to help replace the loss of the federal timber money used to pay for road and bridge work.

Junge said the commissioners asked him to come up with various scenarios for a $2, $3 and $4 tax per wheel on vehicles (with a maximum of $16 per vehicle) to offset expected losses of at least $1.5 million next year from state and federal sources and the rising costs of materials. Junge said a wheel tax would generate as much as $2 million a year.

Contact Steve Miller at 394-8417 or steve.miller@rapidcityjournal.com.

2009 general fund budget

The provisional Pennington County general fund budget for 2009 includes:

$12,926,956 - Roads and bridges.

$8,545,377 - Jail.

$8,234,566 - Sheriff.

$7,901,756 - General government.

$6,085,199 - Juvenile detention.

$6,125,914 - Health, welfare and alcohol.

$5,254,435 - Courts and legal services.

$4,302,584 - Emergency services.

$3,294,494 - Buildings and grounds.

$2,554,238 - Community services.

$2,077,503 - debt service.

Total: $67,303,022.