Agenda Packet Cc - regular meeting 8/28/1989

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as ociation of metropolitan municipalities August 5. 1989 BULLETIN AUG - - AMM Member Cities FROM: Vern Peterson, Executive director --- - --- Roger Peterson, Directcr of Legislative Affairs 1. THE PERPICH TAX BILL Preface The Governor's Tax Bill is upon us, public hearings gave been held by both the Senate and the House, and we are now in a wait and see mode. Interestingly, in three days of hearings before the Tax Committees, not one person testified in favor of the bill as presented including one of the three big business groups that pushed for the original veto. Based on observation at the hearings and one on one discussions, it appears that the legislators are far from supportive. The rext step in the process will be closed door meetings between the legislative leaders and the administrztion. There is no ind-cation of how long this Phase will last or when or if public hearings and input will be scheduled for a modified compromised gill. The only issue that seems to have general agreement among all the parties is that September 30 is the magic date. If the special session is not held by then, it won't be held. A major question is how much of the bill is for rial? The Governor and his staff have indicated several times that; (1) There r st be a firm agreement before a special session will be called; (2) There is . ,ch room for negotiation in the bill as presented; and (3) The Governor has definite bottom line. The problem is that no one knows for bure what is .,egot_able or what the bottom line might be on the part of the governor or the legislature. Analysis General. With a few exceptions, called rctorm by the Admicistration, the tax bill is basically the same as the vetoed bill. In theory it provides the same $274 million property tax relief, the metro versus outstate relief split is about the same at 69% metro instead of b8Z and 312 outstate, the levy limit provisions are identical as are TIF and future Truth in Taxation. The major differences are in classification tax rates, current and future, which cause a difference in how the tax relief is distributed among property class and a completely revised LGA formula with a $152 million dollar shift of aid to schools from other local governments. Other bill differences include the repeal of about 70 aid/grant programs between 1992 and 1994, increased local option fees or tzxes, and the addition of the SCORE bill. Repealers. Article 1 of the bill sets up a Commission on lntergcvernmental Finance to review spending for all mandates and repealej programs. Among the 70 183 university avenue east,ist paul, minnesota 55101 (612) 227-4008