06-09-1997 Council Packet - Laserfiche WebLink

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WW" C ity Finance In Minnesota Municipal finance within the State of Minnesota continues to be contioversial, complex, and ever-changing. Meeting the public’s increasing demands for accountability and more performance-based measurements, while at the same time providing increased services and lower tax burdens, continues to challenge city councils and administrators. The following tc^ics highlight a few issues which may assist you in managing your city. Pr’1 ! t. j “I -J I • C iy Legislative Activity At the time of writing this report, we find ourselves in the midst of the 1997 Minnesota legislative session. One hot topic currently being debated during the session that could have significant impact on municipalities foils under the general description of Property Tax Reform.” Interest in some sort of property tax reform has been simmering for years but has grown significantly since the February economic forecast from the Department of Revenue reporting an estimated state budget surplus of $2.3 billion. Since tax reform movements tend to involve the shifting of tax burdens between t)rpes or groups of taxpayers, it is commonly thought that the best time to implement change is when the state has the financial ability to soften the impact on those most affected. The common elements found in current reform proposals include accountability, smqiUfication, enhancing the competitive position of Minnesota businesses, and general relief to all property owners. Some specific proposals include levy limits for municipalities and reducing die education ftinding reliance on property taxes by increasing the state ’s share of those programs. Although many believe that a comprehensive property tax reform cannot be accomplished in the 1997 legislarive session, some changes are likely to lu^ipen. The following b a brief summary of the 1996 legblative issues and changes relating to city government finance in Minnesota. Restoration of Aid to Local Governments - Cities, counties, towns, and special taxing dbtricts will benefit fi-wn the restoration of $16 million in cuts made to HACA in 1996. In addition, local government aid wUl be increased by approximately $10.7 million for all cities (or an estimated 2.5%) for the 1997 dbtribution based on the implicit price deflator adjustment that was adopted in 1994. Temporary Municipal Liquor Licenses - No organization, registered political committee, or locadm be granted more than one temporary liquor license in any thirty day period. However, combinations of two, three, and four day licenses which do not exceed 12 total days in any given year can be granted. Sununary Budget Statement Publication - Cities outside of the metro area now have the additional optKHi of including the summary budget statement in a city newsletter or other city mailing sent to all households in the city rather than publishing it in the official newspaper. Special Service and Housing Improvement Districts - Cities are authorized to establish special service districts and housing improvement districts without special legislation. Upon properly adopting an ordinance and meeting petitioning requirements, cities can collect fees within the districts and may also issue bonds for improvement expenses. These special service and housing improvement provisions sunset on June 30, 2(X)1. -1-