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County Reserves
Unlike state government, which collects income tax withholding and sales tax receipts regularly throughout the year, counties do not have a constant flow of revenue from which they are able to fund local government operations. Property tax levies, state aid, and property tax credits comprise the majority of county discretionary revenues. Minnesota laws govern the flow of these major revenue sources into county treasuries:
- Counties receive the first half of property taxes from property owners
by May 15 of each year.
- Counties receive the first half of their state aid and property tax
credits from the state on July 20 of each year.
- Counties receive the second half of property taxes from property owners
by October 15 of each year.
- Counties receive the second half of their state aid and property tax
credits from the state on Dec. 26 of each year.
Given this state-controlled flow of revenue, county fund balances are the primary source of funds available to counties for their operating expenses during the first five months of the next fiscal year. An adequate fund balance will provide counties with the cash flow required to finance expenditures and avoid short-term borrowing.
Blue Earth County also uses its reserve account to plan ahead for significant capital expenditures. Because of state restrictions on jail capacity, the County has needed to use reserve funds to build the Blue Earth County Justice Center. By planning for the future, Blue Earth County was able to avoid a significant increases in property taxes to fund the project.
