CCP 03-11-1996 - Laserfiche WebLink

Home Browse Search

I ~. House Committee completes Omnibus Tax Bill Eric Willette (enterprise zones), and timber land. wealth. A parallel provision is cur~ These tax rate provisions are not rently in the Senate omnibus tax bill. I The House Tax Committee put expected to remain intact when the bill The Local Performance Aid together its omnibus tax bill Monday is addressed on the House floor. program would redistribute a portion of night. The major provisions include The senior homeowner property county and city HACA on the basis of I numerous property tax class rate tax deferment prov ision defers all whether or not tocal governments are changes, a property tax deferment for property taxes greater than five percent implementing a system of performance low-income senior homeowners, a new of household income for qualifying measures to increase efficiency and I tax base sharing program for much of senior homeowners whose household effectiveness. The amount of HACA the iron range, a scaled-down version income is less than $30,000. Local put into the pool would be $1 per of the Dawkins performance-based governments would be reimbursed by capita from each county and city plus HACA program, and authorization for the state for the taxes deferred under $1 million of state general revenues. I cities to establish special service this program. This provision is Although the Senate Taxes and Tax districts and housing improvement substantially better than other senior Laws committee has yet to finalize the areas without special legislation. property tax bills discussed this year property tax sections of the Senate I One of the most hotly debated that would have required local units of omnibus tax bill, the subcommittees issues was a provision that offered a govemment and their taxpayers to have completed their work on the sales, property tax rate reduction for cabin finance the senior relief. income, and property tax provisions. I property. The committee debated how The Taconite relief area tax base The subcommittee bills currently to fairly deal with the tax burden which sharing program is modeled after the contain the Taconite relief area tax base would shift from people who own metropolitan area's fiscal disparities sharing program, the provision autho- cabins to homeowners, business program. The program would put 40 rizing cities to establish special service I owners, and fanners. Several commit- percent of commercial/industrial districts without special legislation. and tee members supported an alternative property growth since 1990 into a the provision authorizing cities to that would have created an income- shared pool, removing it from local tax establish housing improvement areas. Ie adjusted circuit breaker for cabin rolls. The properties in the pool would The property tax class rate changes, owners. The circuit breaker alternative, be taxed at an area-wide rate, and the senior property tax deferment, and offered by Representative Tom Bakk revenues obtained would then be local performance aid are not currently I (DFL- Virginia), would have forced the divided between all local taxing in the Senate subcommittee bills. !C state to pay for the cost of the property jurisdictions on the basis of property tax relief rather than shift the burden to other property owners. The amend- I ment was defeated. Representative Steve Kelley (DFL-Hopkins) offered a State budget on track particularly onerous amendment which I would have required cities and counties Gary Carlson to reduce their levies by the amount of tax relief cabin owners received from the rate reduction. Kelley suggested The State Department of Finance unveiled its revised budget forecast for I that local governments could simply the balance of the current 1996-97 biennium as well as the 1998-99 bien- nium. 11\e forecast shows the state has an additional $49 million available cut services to cabin owners. This above the S824 million projected in the November 1995 budget forecast. amendment was defeated. I In response to the property tax This marginal increase is due largely to revised estimates that now project burden shifts caused by the cabin class stronger than expected income tax collections. The estimates for most other rate reductions~ the committee adopted i revenue sources have changed little and most expenditure projections are a series of amendments reducing the I close to estimates established last November. The forecast also shows that I tax rate of most other major property the state would now end the 1998-99 biennium with a slight budgetary classes. In the end, the only classes of surplus of $54 million. These estimates again show that any major state property which were not given a rate financial crisis is not likely in the foreseeable future. I reduction \vere homesteads of the blind The Governor is recommending that all of the additional $49 million be and disabled, seasonal recreational used to increase the rainy day fund and that none be used for additional state ,. commercial property. apartments in spending. This would increase the fund from the current $570 million to an small cities, employment property excess of $620 million. t --~--_._---_._- - -._-- I March 1, 1996 Page 5