COEUR d’ALENE — Kootenai County property owners, your taxes are going up.

By a 2-1 vote Friday, Kootenai County commissioners approved a $96 million budget to present to the public for fiscal year 2017. The budget won’t be formally adopted until after a public hearing Aug. 31.

Commissioner Dave Stewart voted against the proposal.

The budget includes a 3 percent property tax increase — the highest increase allowed by the state. Commissioner Dan Green said a $1.5 million hike in the county’s cost of health insurance was a factor in the tax increase.

“Last year we collected approximately $41 million, and 3 percent of that would be $1.2 million — these are round numbers — so even by taking the 3 percent we can’t even cover the medical insurance increase or any compensation increases for employees,” he said.

To balance the budget, Green said the county and the employees would share the cost of the health insurance increase, with the county paying $865,580 and more than 750 employees making up the other $660,780. According to the county’s website, individual employees who meet the requirements for a wellness incentivized premium now pay $38.50 per month for medical and employees without the wellness incentive pay $77 per month; with the proposed contribution increase they each would pay $20 more per month. For employees with a spouse, the amount paid each month by the employee would go up $20 for the employee and an additional $95 for the spouse. One child is an additional $25, and $40 for two or more children.

Stewart said he disagrees with the budget because the proposed pool of 2 percent for pay raises won’t compensate for the insurance increase that will come out of employees’ paychecks.

“They are going to be taking less money home than what they currently are today, which means you’re balancing the budget on the backs of the people,” Stewart said. “And I don’t agree with that.”

Stewart said studies done by the current and previous board of county commissioners show employees are underpaid by a minimum of 18 percent, and up to 40 percent in some cases. Stewart said he and Commissioner Mark Eberlein campaigned in 2014 for fair compensation. When they were sworn in, they amended the 2015 budget to include pay increases to sworn patrol deputies and command staff. The second phase of the fair compensation project was supposed to take place in the 2016 fiscal year by budgeting raises for the rest of the employees, but that didn’t happen, Stewart said.

Kootenai County Sheriff Ben Wolfinger expressed his displeasure to the board in a letter this week, stating in late winter 2015, when a substantial raise was given to deputies and command staff, the employees were told it was the first step toward moving them closer to the market for their positions. He wrote that the first step was appreciated in the sheriff’s office, which didn’t lose a patrol deputy to another law enforcement agency for several months. However, he added, he has lost four deputies since the first of the year, and employees are upset the board hasn’t delivered on its promises.

“They understood that bringing their pay in line with the market would take time, but when no action occurs after the first step, it naturally brings about these sentiments,” Wolfinger wrote. “Now when we factor in the proposed employee contribution to the insurance, many employees will see less money in their take-home paycheck.”

The $96 million budget — a record high for the county — is $16 million more than last year’s. In addition to the big jump in insurance costs, the county is projecting more than $21 million will be spent on capital projects in the coming year, including a $12 million jail expansion. Green said the spike in capital projects should go down the following year.