BEMIDJI — With cuts to federal and state funding expected, the Beltrami County Board of Commissioners is getting a jumpstart on its 2026 budget.
Beltrami County’s small tax base has some unique contributing factors. It’s the third-largest county in the state and shares geography with the sovereign Red Lake Nation. It also boasts thousands of acres of state and federal forest land. As a result, less than one-quarter of the county’s land is taxable.
“Only about one-third of our entire budget is comprised of property taxes. A lot of people are surprised to learn that,” said Beltrami County Administrator Tom Barry at a May 6 work session. “Property taxes is really only one of the remaining sources of funding that we have available to make adjustments when reductions in federal and state funding occur.”
Barry explained that over the next two biennia, the impacts from reductions in the state’s health and human services budget alone could equal up to 15% of the county’s levy. In a county that has a poverty rate around 16%, nearly a third of the county’s residents are on Medicaid or Medicare.
The state’s looming $6 billion deficit is driving reductions in funding, with cuts to health and human services and transportation included in a budget deal reached by three of the four legislative leaders and Gov. Tim Walz on Thursday.
Commissioners John Carlson and Scott Winter will serve on the budget committee that will begin meeting later this month, with Barry recommending the board approve a budget policy direction, a new step in the county’s typical process.
“Typically, that work falls to the Budget Committee and the Budget Committee makes a recommendation and brings it back to the board,” Barry said. “But we haven't had these kind of significant challenges, where we're going to need to be looking at a lot of different areas.
“And so we thought it'd be better to have the Board provide us that guidance from the very beginning so that we cannot waste time putting the budget together and bringing it back for deliberation.”
In a Wednesday, May 14, phone call, Barry said the biggest relief for county property taxpayers would come from mandate reform at the state level.
“There's been like 40 different mandates in the last three to four years that have added significant cost to local governments,” Barry explained. “A lot of those costs were instituted without any fiscal notes, so legislation was written and passed without any fiscal knowledge of what the impact was going to be on local governments, or even the state for that matter.”
Expected cost shifts for disability waivers, behavioral health, juvenile delinquency and other health and human services are estimated to cost Beltrami County $1.9 million in 2026 and $3.2 million in 2027.
While reductions in payment-in-lieu-of-taxes, or PILT, and other local government aid from the state so far seem to be off the table, Barry said any cost shift or rule change from the state will significantly impact Beltrami County taxpayers.
“If we didn't have these mandates for driving these costs and creating this fiscal crisis, we may have a different outlook financially, both at the state level and certainly what looks to be a future for the county,” Barry said.
