Agenda Packets - 1997/03/24 - Laserfiche WebLink

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r• 1": ?''''? di 1-tel\ g a g .✓ J y ; V II 1 ONLYi — ''''' '"") :"A .: I t 145 University Avenue West, St. Paul, �L\ 55103-2044 League of Minnesota Cities Phone: (612) 281-1200 • (8.00) 925-1122 Cities promoting excellence Fax: (612) 281-1299 • TDD (612) 281-1290 Property Tax Reform Briefing Paper Issue synopsis/League position: Again in 1997, property tax reform has become a major legislative focus. During last year's legislative elections, many candidates committed to property tax reform. With the February announcement that the state's budget outlook is very optimistic and that money for reform could be available,the chances for property tax reform are certainly more likely. However, with 201 legislators talking about reform, there are at least that many variation of what reform ought to be. Generally, the property tax reform proposals that have been introduced to date contain four major elements: 1) class rate compression; 2) additional state funding for schools; 3) cuts in state LGA and HACA to cities and counties; and 4)new Or expanded state taxes. In addition, legislators have introduced many modest proposals to reduce certain property class rates or otherwise • modify the property tax system. To date,there have been 68 property tax related bills introduced in the House and 59 introduced in the Senate. Messages for Legislators: With property taxes a growing concern in many communities, reform must not increase the overall reliance of the state and local units of government on the property tax. If the system must be reformed, city officials want true reform that will guarantee long-term stability for local government finances. City officials believe that levy limits, property tax freezes, and state aid cuts are not reforms and these measures will only delay true, long-term tax reform. City officials support class rate compression where the property tax has created a demonstrated problem for a class of property and where property tax modifications are an appropriate policy response. We support additional state funding for K-12 education as long as it permanently reduces the education reliance on the property tax. We oppose market value levy provisions, levy limits, a property tax freeze and cuts in LGA and HACA. Pending Major Bills/Status: For a summary of the major bills, please refer to the attached side-by-side table. To date. the House has held informational hearings on several of the major reform proposals. The Senate • Property Tax Subcommittee has begun background hearings on various components of property tax reform. Neither body has yet held substantive hearings on any of the major reform proposals. over , AN EQUAL OPPORTUNITY/AFFIRMATIVE ACTION EMPLOYER