01-13-2014 Council Minutes - Laserfiche WebLink

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MINUTES OF THE ORONO CITY COUNCIL MEETING Monday, January 13, 2014 7:00 o’clock p.m. _____________________________________________________________________________________ Page 7 of 17 (PUBLIC COMMENTS, Continued) Hertaus stated the State’s 2013 budget also included an increase on the repair tax for farm and business equipment and a warehouse tax. Hertaus noted $90 million for a new senate office building was included in the omnibus tax bill rather than in a bonding bill. Hertaus stated very few legislators knew about it at the time the legislation was passed. In addition, $338 million of state aid was awarded to the Mayo Clinic infrastructure improvements project, $26 million of assistance was given to the Duluth and St. Paul teacher pension plans, there was a $60 million increase on certain property classifications to fund a general education levy, $400 million of additional money is being spent on K-12, and an extra $15 surcharge on speeding tickets was also added. Hertaus stated approximately $38 million was appropriated from the LCCMR, which involves the Legislative Citizens Commission and the voluntary sales tax that was added a few years ago; $8 million went into natural resource data information; $13 million for habitat restoration and recreation; $3.8 million for water resources; $10.9 million for aquatic and invasive species; and another $636,000 for environmental education. Hertaus stated he also authored a bill that modified the Save Schools levy, which was passed. Hertaus indicated there are little different buckets of money in education that have to be saved for certain things, and one of the things the Safe School Levy was about was for fire protection and mold remediation. The modified bill changed the language to allow the school districts to use some of that money for security enhancements at the schools. Hertaus stated at the beginning of the session the citizens heard a lot of rhetoric about lowering the sales tax rate and broadening the tax base. What this related to was the imposition of a broader tax base and business-to-business taxes. Hertaus stated council members and mayors of communities are aware of the modest budgets that cities have, and oftentimes if the city does not have in-house planners, the city ends up paying quite a bit of money for legal and consultant fees, which typically ends up being around 25 percent of a city’s budget. Hertaus indicated he asked House Research how much sales tax is collected by counties, cities and townships. The fiscal impact of the business-to-business tax was approximately $250 million, which would mean that $250 million would have to be collected at the local level to pay the business-to-business taxes. Hertaus indicated he subsequently co-authored some legislation which was attached to the omnibus tax bill making cities and towns exempt from sales tax. Hertaus indicated the savings probably averages out to be about $30,000 to $40,000 per million dollars for most cities. Hertaus stated he also co-authored legislation modifying the Location Equity Funding Formula for the local school districts. In Senate District 33A, there are eight school districts that service this area. Some school districts, such as Buffalo, Rockford, Delano, and Mayer, have their district office located just outside of the county line but they serve well into Hennepin County. Because the district offices are not located in Hennepin County, they do not qualify for the Location Equity Funding Formula. Hertaus indicated many of the school districts were contemplating relocating their district offices to Hennepin County in order to gain access to that money. Hertaus stated he co-authored legislation to change that to allow those four districts to gain access to that money. Hertaus noted in some of the school districts, it amounted to approximately $1 million.