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j. .. I I - ~l Senate bill includes tough I \ 'fransportation lease-purchase provision .. I funding in Andrea Atherton property entered into before August I, , 1996 to be grandfathered and excluded . S . A proposal that would include from the net debt calculation. Some en ate bIll obligations created by lease-purchase members of the committee expressed agreements for real property in th~ an undcr>tanding of the impact this bill . calculauon of net debt IS makmg Its would have on certain cities, even with The Senate rolled its way through the legislative process. the grandfather provision incorporated. transportation and transit funding H.F. 2941 (Krinkie, R- Shoreview) and The House version of the omnibus proposal into its omnibus tax bill, S.F. 1979 (Stevens. R-Mora) would tax bill does not contain the lease. · which greatly increases the continue to exclude lease-purchase purchase provision. However, the chance that the logjam on this agreements for personal prope11y. original language of the bill, without issue will finally break this year. The bills raise immediate concerns the grandfather provision, is included · The proposal, based on S.F. 832 for smaller cities and cities with lower in the Senate version of the omnibus (Flynn, DFL-Minneapolis), tax bases. If the bill is enacted as tax bill. It is rumored that the final would increase the motor fuels originally drafted, some cities would version will not contain the lease- user fee (gas tax) five cents to find themselves already exceeding the purchase language but those who are · twenty-five cents, index the fee twO percent maximum on net debt. and concerned should contact members of in the future for inflation, other cities would no longer be able to the Senate Tax Comminee immediately. I authorize the Metropolitan utilize lease-purchase agreements for We appreciate the efforts of those cities I Council to impose a general sales real property. who have already called to express the tax of Yz cent in the metro region The house bill was amended in the impact this bill would have on their for transit, repeal the existing taxes committee last week to include communities. 'l' I metro property tax levy for lease-purchase agreements for real transit, and propose changes in the composition of the County State Aid Highway Screening I ' , Board and in the CSAH system I I ~ l'k 1 ? to base funding on lane miles I s property tax relorm now 1 e y. I rather than center line miles. i Gel The tax committee added the ary ar son proposal on a voice vote, but Despite prognostications that the 1996 legislature would not accomplish deleted the gas tax indexing any major property tax reforms, significant changes may be one step closer I provision on a 9-7 vote. The to reahty. At the Senate tax commIttee meetmg on Tuesday, Senator Doug League supports the Flynn Johnson (DFL-Cook) set aside discussion of the property tax sections of the proposal, including its indexing omnibus tax bill until he could attempt to engineer a compromise among I provision. Senate DFL and Republican members. The committee will reconvene on The House funding pro- Thursday, February 29 to consider the property tax sections of the bill. posal,l-I.F. 2070 (Lieder, DFL- At this time, we have little information on any compromise reform Crookston), is in the House Tax ianguage. However, last week, Senator Johnson outlined a major property I Committee and the House Tax tax reform proposal that could serve as the baSIS for a compromise. HIS Bill as introduced does not proposal would reduce property taxes by expanding the sales tax to clothing. contain any transportation or II l1~e 'proposal would ~O~ify the LOA fot~m~la and add approximately $40 I transit funding proposal. [nllllon to the appropnatlOn as well as ehmmate HACA and expand the Please contact your legisla- I homeowner and renter circuit breaker program. The proposal would also tor and urge their support for ,provide property tax relief to commercial and industrial property owners as I I transportation and transit funding I well as apartmentowners thro~gh class rate changes. Many of the changes this session. 'J! \ would be phased 10 over a peflod of years. The Johnson reforms would also I I reduce school reliance on the property tax by an estimated $380 million. - I. L We'll have to wait for the outcome. \r · L ---- ~~ ~ --- -..--------..--- Page 4 LMC Cities Bulletin