By Logan Wells, News Director | Logan@kymnradio.net
The Rice County Board of Commissioners, at the end of September, approved an 8.7% Preliminary Tax Levy increase. In total, the county is set to collect $43.2 million in taxes, a $3.4 million increase. No estimate was provided by County staff at this time regarding the impact of the increase on individual taxpayers. The preliminary levy set the maximum tax increase and can go down, but not up.
While local property taxes make up the largest source of revenue for the county, 42%, the county also receives $38 million from the state of Minnesota. County Administrator Sara Folstad stated that the decline in revenue was based on formulas set by the state government and the amount of money appropriated by the state legislature:
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“We did have an infusion or the legislature provided more money a few years back for additional program Aid and that didn’t change for this year but what we get is based on formula for how our county is either performing or the demographics of our County compared to other counties in the state so you have two parts to County Program Aid you’ve got County Need Aid and County Tax Base Equalization Aid.” – Sara Folsted, Rice County Administrator at the 9/16/2025 Committee Meeting of the Whole
What Is Causing the Levy Increase?
County staff cited higher personnel costs and increased health insurance expenses as the primary drivers of the tax increase. Additionally, legislative changes at the state and federal levels which have reduced county revenue and added mandated services. After two years of increases, county aid from the state will be about $143,000 lower in 2026.
“When you look at if you think about all things equal nothing changes what are kind of the staff because of healthcare bargaining agreement changes things of that nature are Personnel costs including all the taxes and we have a new tax this year with a Paid Family Leave tax that will be going into play that’s $3.157 million so that leaves $374,870 for other things.” – Sara Folsted, Rice County Administrator at the 9/16/2025 Committee Meeting of the Whole
The biggest expenses in the county are Human Services at 25% of the budget, followed by Public Safety and the Sheriff’s Office at 20%, roads and bridges at 17%, and General Government at 14% of the budget.
See the budget packet here.
See the budget packet here.
Levy’s rate over time:
This year’s levy increase is higher than in most years. Over the past 10 years, the average County Tax Increase has been 6.5%. Last year’s levy was the highest in that time span due to the construction of the new Public Safety Center and Jail for the county.
To limit the tax increase, the Board of Commissioners is using $2.47 million in county reserves to pay for projects. The majority of the funds come from its Environmental Services Fund and will be used to pay for needs and operations at the Rice County Solid Waste Facility. Reserved funds will also be used to update scheduling software for the Rice County Sheriff’s Office and for an additional drone to assist deputies with search and rescue operations.
Next steps:
The board will hold its Truth in Taxation hearing at 6 p.m. Thursday, Dec. 11 in the Rice County Government Services Building, 320 Third St. NW, Faribault. At that time County property owners will have an opportunity to provide input on the proposed budget and levy during that meeting.
The board will then approve the final levy and budget later in December.
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