Preliminary numbers show the county could need $1 million in additional budget money, but that may not be the biggest hit to property taxes this year.

If all current and requested programs are funded in 2012, the county would need about $1.05 million in additional tax revenue — a 6.7 percent increase.

But as the board discussed Tuesday, that’s not the real elephant in the county’s tax talks. This year’s tax x-factor is the loss of the Homestead Market Value Credit, which is separate from the levy.

“That was thanks to the state Legislature and governor,” County Coordinator Craig Oscarson said.

Essentially the board is planning for two factors that will affect taxes. The newest is a $1.5 million loss of the Market Value Credits, which Oscarson said equates to a 9 percent increase in taxes.

But that amount won’t be felt evenly.

Instead of having money deducted through the Homestead Market Value Credit, homestead properties will instead receive an exclusion.

But the change has its flaws, according to Oscarson. The switch reduces the amount of taxable value while keeping the tax need the same, which essentially raises taxes.

Oscarson said the exclusion will shrink the tax base and raise tax rates, especially for non-homestead properties like rental homes, commercial property and agricultural land that doesn’t include a home.

“It’s a bad time to be increasing commercial property taxes,” Commissioner Jerry Reinartz said. “Most of those businesses are struggling.”

The second factor is the general budget and levy increase. After discussing a maximum 9 percent tax levy increase, the board has honed that number down to around 7 percent. Commissioners will approve a maximum levy increase around that mark next Tuesday, but that doesn’t mean they’re locked into that number.

“The budget is a moving target,” said Commissioner Ray Tucker, who chairs the Finance Committee.

Once a maximum levy is set, the board can work to decrease the levy hike, but they can’t raise it. The board sets its budget and levy change in December, so there’s still time to look to more cuts.

“You’ve got a few months to figure out if you can cut and where,” Oscarson said.

Oscarson said the county board is facing a total $2.5 million budget gap, with much of the increases traced back to the state.

“Of that money, the state basically shorted us over $1.7 million,” he said.

Along with the $1.5 million credit reduction, the state shifted about $200,000 in Human Services and another $7,200 in Correctional Services.