02-24-1997 Council Packet - Laserfiche WebLink

Home Browse Search

FEB 04:Z7Ptl LEmiI-ijE OF till CITIES P. 1 LMC Qiim - Frida y Fax - A weekly legislative update from the League of Minnesota Cities Vol. 2. No. 6 February 14,1997 Levy limits on the horizon? $85 million of city aid was shifted into the school formula to kG6;3 schco: levies down. But from 1990 to 1996. school levies increased by 51.1 percent. Over the same period, city le>/ies increased 29.1 percent Even if the legislature does not pass meaningful reform this session, there will surely be a push for some form of levy con straint on cities and counties by many legislators and other inter ested parties Legislators need to get the message that cHies are not the main driver in increased property taxes They need to understand the real-life impact of levy limits when unique circumstances arise like the disastrous weather of the past few months They need to know that city officials want propehy tax reform, but also need to be able to raise sufficient ravenues to fund city services. League staff has been spreading these mes,?ages at the Capitol and v;ill continue to do so, but the message hits home ail the more strongly when it comes from city officials like you. House Tax committee to look at TIF and intrastate competition Property tax reform discus sion? are tiealing up at the legisla ture. With those discussions comes the inevitable talk of impos ing a property tax freeze or rein stating levy limits. At a recent Minnesota Government Relations Council conference. House Tax Chair Dee Long mentioned that the legislature may need to con sider levy limits as part of lax reform. Many legislators appear to support reform principles consis tent with certain aspects of the League's policy - increasing the state’s share of school funding, simplifying the classification system, compressing the class rates without shifting burden to lower-rate classes Many legisla tors share our concern that there is an over-reliance on the property tax Increasing state funding of schools would grant property tax relief statewide. Yet the legislature seems unv,/i!ling to offer property tax relief without some guarantee that property taxes will remain lower. We have heard many legislators state that they believe any property tax relief will be erased within a few years through increased city and county levies The only way they feel that they can ensure lower property taxes is to impose levy limits or a freeze, or to require voter referenda for increases in city and county levies. Ironically, it has been school levies which have shown the greatest growth In 1990 almost Fvr nwre information on city UghhUhe Huun. conuul any memher of the Leagm of Minnesota Cities Intergosenuncntal RdaUons teairt On I uesday. February 18 the House tax committee v,^il! discuss tfie state auditor’s findings on TIF enforcement and also the issue of intrastate competition among cities for development This hearing represents another in a long list of recent legislative hearings focused on tax increment financing and may be another indicator tfial TIF will erupt as a major legislative reform initiative in 1997. The State Auditor’s office v-all present to the committee findings related to its new TIF enforcement responsibilities We expect the report to highlight provisions in the TIF statutes that have been interpreted differently by different groups. The second topic of the hearing will involve a discussion of intrastate competition among cities for development. Several recent news stories have sug gested that Tl.- IS being used to lure businesses from one city to another. These stories have provided additional ammunition to TIF critics. The hearing will include a panel of city and TIF representatives to discuss intrast ate competition and the merits of TIF as a economic development and redevelopment tool