State Auditor Blaha Releases 2021 County Finances Report - May 11, 2023

“Using one-time funds effectively was key to counties weathering the global pandemic”

Saint Paul, MN – “Understanding the differences between how one-time and ongoing funding affects local budgets is the first step in managing a local budget well,” said Auditor Blaha.

Earlier today, State Auditor Julie Blaha released the 2021 Minnesota County Finances Report. The Report was compiled from 2021 county reporting forms, financial statements, and audits. The Report summarizes the current and long-term trends for county revenues, expenditures, and debt.

“Using one-time funds effectively was key to counties weathering the global pandemic,” Blaha continued. “Although revenues were lower in 2021 compared to 2020, counties responded by keeping their spending down, while building up reserves to meet unexpected costs or financial obligations.”

“The decrease in revenues was mainly due to the ending of pandemic‐related CARES funding which provided over $726 million to counties in 2020,” added Blaha.

The 2021 Minnesota County Finances Report shows revenues decreased 5.7 percent and expenditures decreased 6.2 percent. Taxes, state grants, and federal grants were the most significant sources of county revenues in 2021, accounting for 84.1 percent of total revenues. Human services, general government, streets and highways, and public safety were the primary categories of expenditures for counties in 2021, accounting for 79.9 percent of all county expenditures.

The highlights of the report include:

Current-Year Trends

• Minnesota county revenues totaled $8.4 billion in 2021. This represents a decrease of $510.0 million, or 5.7 percent, from 2020.
• Counties reported total expenditures of $8.4 billion in 2021. This represents a decrease of $561.5 million, or 6.2 percent, from 2020 total expenditures. Between 2020 and 2021, current expenditures decreased 6.4 percent to $6.7 billion, capital outlays decreased 10.6 percent to $1.3 billion, and debt service increased 11.8 percent to $461.7 million.
• In 2021, Minnesota counties reported outstanding long-term debt of $4.2 billion. This represents a decrease of 0.5 percent from the long-term debt reported in 2020. Of the $4.2 billion in long-term debt, $4.0 billion was outstanding bonded debt, and $270.0 million was other long term debt.
• Minnesota counties reported enterprise operating losses of $137.0 million in 2021. This represents a decrease of 26.6 percent from the operating losses of $186.8 million reported in 2020. County enterprises posted a net profit of $90.3 million in 2021, an increase of 4.5 percent from the $86.5 million net profit reported in 2020.
• Minnesota counties’ unrestricted fund balances of the General Fund and Special Revenue Funds totaled $3.4 billion in 2021. This represents an increase of 5.4 percent over 2020. The average unrestricted fund balance as a percent of current expenditures for counties was 50.2 percent in 2021, compared to 44.6 percent in 2020.

Long-term Trends

• In actual dollars, total county revenues rose 41.3 percent from 2012 to 2021. When adjusted for inflation, the increase in total revenues was 12.9 percent over this period.
• In actual dollars, total expenditures increased 40.5 percent from 2012 to 2021. When adjusted for inflation, county expenditures increased 12.2 percent over the ten-year period.

The complete report, which includes an Executive Summary, graphs and tables, is available on the OSA website.