2018.01.29 CC Packet - Goal Setting

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PERMANENT FUNDING FOR THE SCHOOL BUILDING BOND AGRICULTURAL PROPERTY TAX CREDIT Position: Washington County supports legislative efforts of the Minnesota Farm Bureau to identify a funding strategy to pay for the school building bond agricultural property tax credit implemented in the 2017 legislative session on an on-going and permanent basis. Issue: The school building bond agricultural property tax credit provides a credit of 40% of the property tax attributable to school district bond levies. Under Minnesota law a school district is required to hold a referendum on the question of issuing bonds that are used for capital improvements or the construction of new facilities. The property tax levied by the school district to fund the debt issued to improve or construct new facilities is spread on all property types, including residential, commercial and agricultural properties. The 2017 Legislature approved the school building bond agricultural property tax credit to provide property tax relief for owners of farm property. The credit reduces.a farm property owner's property tax bill and the state makes a payment directly to each school district to reimburse them for the amount of the credit. An appropriation is made from the state's general fund to the Commissioner of Education to fund the cost of the school building bond agricultural property tax credit. In order to protect this property tax credit from future funding reductions, strategies are being considered to ensure the credit is provided in future years. Support and Opposition: Support would come from farm organizations and others that support lowering the tax burden on farm property owners including other counties, especially those with high concentrations of value from farm properties. Opposition may come from groups that oppose efforts to dedicate state funds for specific purposes thus protecting some programs over others from potential reductions when state resources are under pressure. Previous Consideration: None. No Action: If no change is made, the funding for this school building bond agricultural property tax credit may be cut when the state's general fund is under pressure of shrinking surpluses or deficits. Financial Implications: There is no direct impact on the county budget, however this property tax credit program provides for significant property tax relief for owners of agricultural property within the county. Contact Person: Kevin Corbid, Deputy Administrator Washington County Office of Administration 651-430-6003 Kevin.corbid@co.washington.mn.us 33