By Rep. Paul Anderson
We heard testimony recently in the House Property Tax Division about the success rate of bond issues when put before the voters. More specifically, it was a comparison of the ratio of capital construction referendums in the seven-county metro area successfully passed compared with the same in Greater Minnesota. A spokesperson for the Minnesota School Boards Association testified that in the past three years, a total of 65 capital referendums were put on the ballot in outstate Minnesota. Of that total, only 14 were passed by the voters and 51 failed. That’s a success ratio of 21 percent. Contrast that number to the 89 percent of capital referendums passed in the metro area.
A big reason for the low number of bond issues passing in rural areas has to do with how the construction of new school buildings is paid for. All agricultural land is part of the levy for capital referendums and, in many districts, ag land makes up a large majority of the tax base. So, in many cases, the cost of new construction falls more heavily on the farmers who own that land.
The tax levy is figured differently for the other kind of school referendum, and that’s called the operating referendum. That’s when additional funds are raised for the daily operation of a school. In this case, only the house, garage, and one acre are figured into the levy.
There was a provision in last year’s vetoed tax bill that would have helped the owners of ag land pay the cost of capital referendums. It would have provided a 40 percent credit paid by the state to the owners of agricultural land for all current and future capital referendums. There is strong support for this provision, and odds are high that it will be included in this year’s tax bill, as well.
In addition, a $100,000 valuation exemption from the statewide business tax was also included in last year’s tax bill, and that too is expected to make it into this year’s bill.
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The all-important February budget forecast contained good news in that the surplus grew by $250 million. It made some assumptions that individual income taxes will increase, in part because of changes in the federal tax code. If federal tax rates are lowered but some deductions eliminated, the result would be higher incomes. And that would translate into larger state income tax collections. But those are a lot of proposals that first must be enacted before anything changes.
It’s expected that spending targets will be released sometime this week. Each finance committee will be informed about the amount of spending they can do. Then it’s up to each of those committees to craft a bill that stays within those limits.
First committee deadline is this Friday at midnight. Bills must have been heard in all policy committees before that time in order for them to move on. Spending bills have until the end of the month to be heard in their respective committees.
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