Agenda Packets - 1997/04/07 - Laserfiche WebLink

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• • I elp for tax system, Market value and property tax distribution Statewide by major property type for taxes payable in 1996. chools and budget , 5.99% i LI Market value r c ' ; ® Property tax Steve Novak .lbU�„,_ my budget package are the"prin- 391% `1 . ciples for reform": 33.0% recently introduced S.F. 1100, > Reforms and cuts the prop- ; _ Minnesota FAIR Act, which em tax comprehensively: a 40 i _id produce comprehensive percent cut and a one-rate education and budget reform system. 14.9°,6 i ° 14.3% Minnesota. Simply put, we > Reforms education funding, 7 2% 72% 10'5 6 ° 7.9% i dramatically reduce the bur- with S750 million in new money � 2.8% 2.3%° 3.9/° of property taxes by increas- for K-12 and S125 million for - • i '. the state share of education higher education. j Total Residential Rental Cabins Commercial/ other ting and by bringing all tax > Reforms the budget proc- i farms homesteads residential industrial i s down substantially. The ess; ends the accounting gim- j Source:MinesotaDeoarvnentofRevenue aomy and a budget surplus micks;pays the cost up front. • .e 1997 the year to accomplish >- Honors revenue neutrality tprehensive fiscal reform. and the cost of government taxes on business,rental housing, options could also be considered. inesota doesn't need studies statutes. and farming. The system would > Provide S35 million for . constitutional amendments. >- Recognizes the dual nature be based more on ability to pay. . classroom educational materials. deserve leadership and action of land as the foundation of the > Establish tax rates at a fair > Increase K-12 funding by • Ti the Legislature elected. to ecosystem and an economic level and rely more on income to $750 million; 5175 million for this job done. commodity.The property tax sys- calculate ability to pay. higher education in FY'98-99. .F. 1100 is the only proposal ' tern should be a friend of the > Retain income-sensitive cir- The budget process reforms. td on fundamental principles environment and a foe of urban cuit breaker, target relief. to would: : would provide solutions to sprawl,not•the opposite. homeowners and renters. > Target the budget reserve at al problems which all citizens > Progressively reforms farm, > Impose a flat 3 percent tax 5 percent of biennial expendi- te exist in Minnesota and that rental housing and business taxes on business real property. tures; increase the reserve from ises on the priorities of most and bases taxes more on ability to The sales tax elements of the 5261 million to S1 billion. trs:education and tax reform. pay. plan would: > Curtail spending in excess . 'he property tax has increased > Creates a new,stable,long- > Cut rates from 6.5 percent of projected current receipts. n Si billion to $4.6 billion in term fiscal relationship between to 6 percent as of Jan. 1, 1998, > Create fiscal dividend con- last 18 years, making our state and local governments. and to 5.5 percent on Oct. 1, cept—tax credit—to income tax st regressive tax the state's > Cuts tax rates (sales tax 1998. payers if surplus exceeds budget or revenue generator. This down to 5.5 percent and properry > Exempt food, health care, reserve. • .. created a K-12 education tax down by 40 percent), simpli- business-to-business sales and > End accounting gimmicks, ding system that is overly de- fies the tax system, broadens the sales to nonprofit organizations. with a one-time$493 million cost dent on property tax and al- tax base and makes Minnesota's > Tax most purchases, but at paid out of the surplus. s for educational disparities tax system more progressive. ' lower rate. We need to break the back of seen property-rich and-poor The property tax elements of The education funding ele- the regressive property tax, pro- Dol districts. the proposal would: ments of the proposal would: vide for long-term relief,and save l.F. 1100 ends education fund- > End the dominant role the > Ensure state funds for basic bur public education system dependence on the property property tax system plays in state support of K-12 education. while at the same time remaining • replaces that revenue by ex- policy decisions. >- Require local property taxes fiscally prudent.S.F. 1100 accom- iding the sales tax base and > Create two classes of prop- to still pay for capital improve- plishes these extraordinarily diffi- s both the property and sales erty at the local level that recog- ments and referendum levies. cult tasks. It's never the wrong rates. By expanding the sales nizes the dual nature of land. >- Allow local districts to re- time to do the right thing! base,we can cut tax rates and Class 1 would include all property tain discretion over all basic op- 'er taxes but still gain the most except Class 2 taxed for all pur- erations. — Sen. Steve Novak, DFL-New. nomic benefit from a growing poses. Class 2 would include >- Provide a 3 percent per year Brighton, is a member of the nomy. This will provide state farmland, timber and certain un- increase over fiscal year (FY) '97 Senate Tax Committee and chair iget financial and fiscal stabil- developed land taxed only for basic education formula allow- of the Senate Jobs, Energyand well into the 21st century. roads and watersheds. ance of$3.505 to 53.610 in FY'98; Community DevelopmenCorn- The following key elements of > Substantially cut property S3,720 in FY '99. Other funding mittee. v