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Hennepin County officials on Tuesday recommended a $2.1 billion budget for 2021, which is lower than this year’s spending plan and would be financed without an increase in the county’s property tax levy.

Responding to the financial fallout caused by the COVID-19 pandemic, the proposed budget offered by County Administrator David Hough would be $300 million less than this year’s. Hough set the capital portion of the budget at $187.9 million, a steep 60% cut in this year’s capital budget.

A 0% increase in next year’s property tax levy would be the lowest rate change since the County Board cut the property tax levy by 1% in 2010. The board has raised the county’s property tax levy each year by an average of 4.6% since 2015, and last year raised the 2020 levy by 4.75%.

The County Board will set the maximum tax levy on Sept. 29 and finalize the budget on Dec. 15.

Ramsey County officials three weeks ago also proposed no increase in the county’s property tax levy.

In Hennepin County, the cost of providing protective isolation and housing for homeless people vulnerable to COVID-19 is an expense that won’t go away, said Hough. The county has served 1,500 homeless people this year, and expenses in 2021 for housing and the implementation of a potential vaccination program could run as high as $40 million.

“We have a moral responsibility to this population,” Hough said. “We will not turn them out on January 1, 2021.”

In other action Tuesday, the board approved another $12 million in federal funding to help small-business owners who have been affected by the virus. The county recently completed a third round of applications, and the additional dollars bring the total offered by the county to $40 million.

Commissioners also discussed creation of a community asset transition fund to help Minneapolis businesses and residents on Lake Street and West Broadway buy properties that were damaged during the civil unrest after George Floyd’s death on May 25. A group of community partners will identify property owners who are at risk of market conversion or gentrification.

Anecdotal evidence suggests that speculators are already on the move, officials said. Cash offers are being made to owners who are vulnerable, putting further stress on businesses owned by people of color in cultural districts that were already at risk of displacement, said Commissioner Marion Greene.

She suggested the county offer $3 million to the program and leverage another $7 million from the Local Initiatives Support Corp., which supports economic development and social initiatives. She said she hoped other financial institutions will become investors.

David Chanen • 612-673-4465