Counties’ Dance Becomes Ever More Difficult

Counties need to be even more innovative to meet new challenges

The old joke about Fred Astaire and Ginger Rogers is that she had to do every dance step he did but backwards and in high heels.

That’s the situation with county governments and their state and federal colleagues. If you think about the broad categories of what is expected from any government - keep the public safe, assure equal treatment under the law, help those at times in their lives when they are most vulnerable, build and maintain infrastructure, promote the conditions for economic growth and assess and collect taxes fairly - the scale and means of government changes, but the basic functions are similar.

The work of counties, however, often comes with the added baggage of restrictive state and federal requirements. It’s like asking Ginger to do everything that Fred does, to do it as well, but to step lightly while navigating extra obstacles.

The dance likely will become more complicated for counties. They will be asked to compensate for cuts in federal safety net programs. The Trump Administration is turning to counties to support the identification, capture and detention of immigrants targeted for deportation. And proposed ideological mandates could tie federal grants to everything from eliminating programs that promote diversity and inclusion to giving areas with high marriage and birth rates favorable status for infrastructure spending.

Hennepin and other large urban counties will bear the brunt of these changes. Take just one area, social services. Health and human services typically are seen as mainly state and federal responsibilities. In fact, it often is counties that are tasked with administering the programs and delivering the services. That’s especially true in Minnesota which is just one of 12 states that requires counties to provide health and human services to residents.

Hennepin County’s 2025 operating budget is $2.54 billion; about 60% of the projected spending is from state and federal sources for social services. Those funds will be stretched if cuts to social programs proposed by Gov. Tim Walz and the Trump Administration become reality.

Minnesota counties have been innovators in service delivery and government efficiency. They have forged new partnerships with each other and with other levels of government, reduced administrative overhead and streamlined services.

Still, the broad range of services county governments in Minnesota provide are expensive. According to the Minnesota Auditor, counties spent more than $10 billion last year on operations and services, infrastructure and debt service.

Counties get their revenue from three primary sources: property taxes; intergovernmental transfers (funds raised by the state and federal governments and passed on to counties); and fees (charges imposed on some services, for example licenses). A few Minnesota counties (including Hennepin) also impose small local sales tax.

Minnesota counties depend more on intergovernmental transfers than the national average, mostly because of revenue sharing from the state. Minnesota’s payments to counties - about $340 million last year - come mostly through a two-part formula that recognizes high-need counties (those with a large percentage of elderly or low-income residents, for example) and compensates counties that have a large amount of low-value property.

Given the service demands on county government and the costs, calls for reforms and spending reductions are common. While recent decades have brought many successful efforts among counties to share services and reduce overhead, more innovation is needed. Some areas that would drive big reforms include the following.

Realign service delivery to eliminate redundancy and improve outcomes. Hennepin County will spend nearly $1.3 billion on health and human services in 2025. Meanwhile, the Minneapolis Public School District hosts its own system of in-school clinics and mental health services. How much more efficient and effective would it be for the clients of these two overlapping systems if there were a single, integrated health delivery network provided by the county?

On the other side of the coin, Hennepin County provides free academic tutoring and programs for new arrivals to the country to help them acclimate to schools, initiatives that could be delivered as part of the public school curriculum. Other opportunities eliminating redundancies between counties and other levels of government abound in housing, criminal justice, job training and other areas.

Create a more fair and transparent tax system. The primary source of revenue that counties control is property taxes, among the most regressive and unpopular taxes government at any level imposes. A half century ago, thoughtful Minnesota lawmakers recognized that local property taxes were an unfair and ineffective way to fund critical services. The “Minnesota Miracle” made local schools less reliant on property taxes by transferring more education funding to broader based and more fair state taxes.

Counties would benefit from comprehensive tax reform that would create a new “Minnesota Miracle” by modernizing Minnesota’s taxes at every level. In today’s economy, it makes more sense to tax consumption than work, savings, property and investments.

The state should create a sales tax that has a lower rate than the state’s current 6.875% but a broader base (most services and goods should be taxed). A state-designed sales tax could and should include protections for lower-income Minnesotans to retain progressivity. An updated sales tax would generate sufficient revenue to allow state legislators to reduce individual income and corporate taxes making Minnesota more competitive. Giving counties broader authority to use a fair, progressive and productive sales tax would reduce reliance on the inherently regressive and intensely unpopular property tax.

Implement new partnerships with clear goals and accountability. Counties need to build on the law enforcement innovations spurred by the just-resigned U.S. attorney for Minnesota, Andy Luger. He came into office in the midst of a frightening spike in crime. Luger saw the opportunity “to have an immediate impact on the community,” as he told a reporter.

He reached out to the Hennepin County sheriff and the Minneapolis police chief to forge a partnership to dismantle the gangs that are at the root of much of the criminal activity in the Twin Cities. Using a federal law that was created to attack organized mobs, Luger and his county and city partners made an enormous difference. Nearly 100 suspected gang members have been prosecuted and, while homicides remain high, overall, the rates of violent crimes and carjackings in Minneapolis are declining.

Given the large number of local, regional and state law enforcement agencies in Minnesota and the 45 cities within Hennepin County, new partnerships that make the most effective use of prevention, interdiction and investigation could realign roles to make communities safer and all law enforcement agencies more productive.

Hennepin, metro communities and the state should pursue another critical public safety partnership. Hennepin County Home School closed in 2021 and Ramsey County’s Boys’ Totem Town in 2019. That leaves the state’s two largest counties with few options for placing juvenile offenders beyond long stays in detention or placement in the distant and more restrictive Red Wing program. While the trend has been toward keeping juveniles out of incarceration, not every young offender should be returned to the community.

“People argue that we should just not have any children detained. That’s not reality,” said Hennepin County District Judge Tanya Bransford. “If you have people charged with murder, they have to be detained.”

Juveniles would be better served if those sentenced to incarceration were placed in a facility that provided academic and vocational programs and training in social skills. As is the case with other state-county partnerships, Minnesota with its deeper pockets, could provide funding while the counties with their on-the-front-lines expertise could deliver the service.

While policymakers in Washington and St. Paul are bogged down in partisan fights and angry finger-pointing, counties can’t afford the luxury of putting politics ahead of the people they serve. The services they deliver often are critical to public safety and the well-being of the most vulnerable among us.

To be sure, not all county commissioners rise above politics. But if government is to reclaim the trust of the public, it’s likely the first step will come from the innovation of counties.

(Thank you for reading Politics and Policy at the Innovative Center. Your comments always are appreciated. If you don’t subscribe, please do so. Subscriptions are free and email addresses aren’t shared.)