Are we providing steak when we only have to provide hamburger?” Larry Jepsen asked when the Polk County Board held a brainstorming session for the 2011 county budget last week.

Considering the gloomy short-term economic outlook county administrator Dana Frey presented, county supervisors believe they have to analyze all expenses with an eye toward savings.

Jepsen’s comment was made in the context of what programs and services are mandated by the state. He said that while it is commendable that departments of Polk County government want to do their best to serve citizens, he believes that in some cases county government is doing more than it is required to do at the expense of county taxpayers.

“I think it’s fair to say that the worst for local governments is probably yet to come,” Frey said at the start of his half-hour presentation about the budget process, all levels of the economy and what implications prevailing conditions have for the 2011 county budget.

The bleak economic picture Frey painted included falling equalized property values, flat sales tax revenue, a high unemployment rate, increased tax delinquency and the inability of the state and federal governments to ride to the rescue of local governments for the foreseeable future.

Polk County had the fourth largest percentage decrease in equalized value of all Wisconsin counties last year, and Frey believes there may be another “fairly large drop” this year when that data becomes available in a couple of months.

“There really is no good news, I think,” Frey said.

He said it will be a challenge to provide adequate funding for essential services and minimize property tax increases as costs for personnel and energy increase.

While trying to meet the 2011 budget challenges, he said, Polk County also must work toward long-term sustainability by making careful use of one-time revenues, measuring what effect decisions about the 2011 budget may have in future years and rebuilding depleted reserves.

Frey has three guiding principles for the 2011 budget process:

• Maintain fiscal discipline and improve budgetary sustainability.

• Improve the allocation of funds based on priorities set by the county board.

• Improve the efficiency and effectiveness of expenditures.

By state statute, a county administrator is responsible for submitting an annual budget to the county board. Frey expects to have a draft 2011 budget prepared by Sept. 10. The county board adopts a budget for the following year at its November meeting.

The intent of last week’s budget session, which took place before the board’s regular July business meeting, was to give county board members the opportunity to provide Frey and department heads with general guidance as to priorities, consolidation of services between departments, privatizing or outsourcing services, fee changes and other elements of Polk County government.

Ken Sample said he thought the board should ask for a budget presentation that would include a $1.5 million reduction in operating costs and an additional $1.5 million reduction elsewhere.

“That money gained,” Sample said, “would be set aside to be redistributed for debt reduction and/or high priority capital improvement projects that we haven’t dealt with in the past.”

Like others, Sample said he is “not even considering borrowing any money” at this point, or considering any fee increases or increase in programs.

With some 70 percent of the budget consisting of personnel costs, Finance Committee chairman Gary Bergstrom doesn’t see a great deal of flexibility possible, particularly considering that most programs are state-mandated or viewed by most people as good programs that need to be maintained.

Bergstrom said many board members were looking for creative ideas from the administrator.

Brian Masters said the board, governing committees and department heads all have to step up and set priorities.

Warren Nelson wondered if it would be possible to increase the county sales tax one-half percent.

Jepsen said that while that is not possible, he believes a “buy local” promotional campaign could generate considerably more sales tax revenue — perhaps $250,000 per year more.

“That’s an area we can do something about,” he said, arguing that increased support for tourism promotion and the Polk County Economic Development Corporation may be leveraged investments that bring multiplied returns.

“Let’s figure out where our priorities are in relationship to getting people to Polk County and spending money — our own residents and our guests,” Jepsen said.

“I think our number one priority in this county should be the protection of children,” Pat Schmidt said. That would mean a commitment to the Human Services Department’s Child Protective Services division.

“My second thought is: We need to protect the budget for the law enforcement,” Schmidt said. “People need to be safe in their homes. I would spend my money there before I spend money on highways. I can drive on patched roads, but I need safety in my home, and so do the other people in Polk County.”

Bergstrom, however, cautioned there are “lagging effects” to delaying road maintenance. The highway department has been short-changed for several years, he said.

“Our roads are going to hell in a hand-basket, and so are the people in the county, with divorces and unemployment,” Highway Committee member Dean Johansen said.

Neil Johnson said many taxpayers say they need help. He believes something has to be done to compensate for reduced property values.

“People are really hurting with real estate,” said Kris Kremer-Hartung, who works as a real estate agent. She said area real estate agents expect property values to continue to drop.

Johnson agreed that it may be possible to reduce service levels.

Herschel Brown favors trying to privatize and outsource services. He believes service providers will jump in to fill any breach.

Kremer-Hartung and Jim Edgell agreed. If at all possible, Edgell said, the county should look into contracting for some services.

“Short of buying a lottery ticket, is there any hope?” Jay Luke quipped, addressing Frey.

Despite the bleak budget landscape he sees for the next couple of years, Frey is confident the economy eventually will rebound. When that happens, he said, Polk County again will be the growing county it was before the Great Recession arrived.