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FRIDAYFAx -= Vol. 3, No. 14 y ot w.en7cx� A weekly legislative update from the League of Minnesota Cities April 8, 1998 The end is near.. a Early this morning, the Tax Confer- payable in 1899. Commercial and payable in 1999. However, the law was ence Committee nearly completed industrial property class rates will be also amended to allow for anaddi- work on the 1998 omnibus tax bill. The reduced to 3.5 percent from the tional growth factor based on new compromise includes a tax rebate or current percent Other class rate construction of commercial and approximately $500 million, property changes are listed in the table below, industrial property. Therefore, the levy tax reforms that will cost $427 million, The property tax shifts that would imitat for each city will include levy limits fortaxes payable in 1999, otherwise occur are buffered by an three adjustments: inflation growwth, and a host of city specific provisions expanded education homestead household growth and commercial and ranging from local sales taxes to credit, reduced school levies, a new industrial growth. special tax increment financing fiscal disparity homestead and The final compromise does not leglslatlon. The committee will meet agricultural credit aid, county family Include a highly controversial limited again this afternoon to put rinal preservation aid and a modest $3 market value provision that was touches on the compromise and the million increase per year for the Local originally included in the House bill, hill is expected to be signed by the Government Aid program. That proposal would have limited the conferees later today. Despite an attempt by the House market value growth of all property by The property tax reform includes and govemor to extend lavy limits, the the lesser of a percent or the con- the govemor's class rate compression finaloompromise mirrors current law. sumer price index. The current law immediately implemented for taxes Levy limits will be in place for taxes limited market value provisions tW apply to homesteads, agricultural r _ - -- homrleads and cabins remain in Impact of Last Year's Tax Reforms & place I Conference Committee Proposed Class Rates Also included inthebillare authorizations for local general sales Taxes Taxes Proposed i taxes for Rochester, Owatonna, � � a payable Hutchinson, Two Harbors, Wincna, Property class 1997 1998 19% I Bemidji, Detroit Lakes, Fergus Falls, and the St. Cloud area cities of Homestead -$75,000 1 °,6 1 % 1 % i Bartell, Sauk Rapids, Si. Joseph, Homestead >$75,000 2 1.85 1.7 Waite Park, and St. Cloud. 1 add Qualifying low income various rates various rates 1 i The comrtutteeed one Late rental I amendment that would dedicate future Single- unit rental- $75,000 2.3 1.9 1.25 budget surpluses for cash paymentfor capital that would otherwise Single-unit rental >576,000 2.3 2.1 1.7 projects 2 -3 unit rental 2.3 2.1 1.7 be funded through state bond pro unit rental 3.4 2.9 2.5 i ceeds. The amendment was cdticized 4 + C unit re iayindusMal 3 2.7 2.4a i by the Commissionerof Revenue as x$150,000 an unnecessary restriction on future 4 C 4.6 4 3.5 Iegislatures and the new governor. The >$150,000 and utility commissioner suggested that this Cabins <$75.000 15 1.4 1.25 provtslon could be a deal breaker for Cabins >$75,000 2.5 2.5 2.2 the governor and could possibly force Education homesead none 32%1$225 6"x$320 i a veto. We will know more this after- credit %/maximum noon. For more information an city legislative lsxaes, contact any member of the Lease ofMinaeanta Odes Iarerguvlrnmenral Relations team.