Hennepin County is set to approve $2.6 billion budget. Here's what it pays for.

The Hennepin County Board is expected on Tuesday to approve the largest hike to the county's tax levy in more than a decade as part of a $2.6 billion budget for 2024.

The proposed 6.5% increase in property taxes would primarily fund county worker salaries and benefits. It would be the largest jump since 2008, when the County Board approved a 6.55% hike. Property taxes are the county's biggest source of revenue and will generate $991 million in 2024.

The impact on a median value home, which is $391,600, is an estimated increase of about $38 annually. The actual impact varies across the county's 44 cities, depending on property value, the makeup of the tax base and other levies on the books.

Hennepin County's levy is just part of homeowners' tax bills, with city and school levies set independently.

Nearly all of the new revenue from increased property taxes will be spent on employee pay and benefits. About $34 million is for wage increases, and $24 million will cover rising health care costs with about 90% of employees' insurance costs covered by the county.

Nevertheless, health care costs have been one of the more controversial topics of the budget process. Some county workers have spoken out about higher premiums for what they say is less comprehensive care.

The number of county workers is expected to grow by 4.2% next year for a total head count of 9,830 full-time equivalents. Most departments are expected to add people, with the biggest increases in resident services and public safety.

Altogether, the 2024 Hennepin County budget is about 5% smaller than this year's, largely because of a $118 million decline in capital spending that officials say is in line with a five-year infrastructure plan. About $2.3 billion pays for county operations and the rest goes to infrastructure maintenance and improvements.

The county budget includes about $20 million to address racial disparities, just a fraction of a percent of the total budget, but leaders say the work is having an impact. The County Board declared racism a public health crisis in 2020.

The money funds ongoing efforts to diversify the workforce, including training and education programs to recruit and retain employees to better represent the communities they serve. About 34% of county employees are people of color, up from 24% when the work began about a decade ago.

Leaders say a more diverse workforce helps make county government more equitable throughout the services it provides — including health care, housing, law enforcement and even climate policies.

"That's a big part of who we are," said David Hough, county administrator. "It's the right thing to do."

Hennepin County has a massive annual budget, but a lot of the spending is dictated in some way by the source of the revenue.

For instance: Social programs and health care make almost 45% of the county budget, but much of the funding for those services comes from federal, state and local aid dedicated to specific programs.

Less than half of county revenue comes from local taxes, including more than $200 million from sales taxes and nearly $1 billion from property owners. For services primarily funded through property taxes, there are planned spending increases for the sheriff, county attorney and administrative operations.

The County Board has reviewed the budget plan since September. Board members will vote on the tax and spending plan at their last regular meeting of the year at 1:30 p.m. Tuesday.