10-15-1984 Council Packet - Laserfiche WebLink

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-2- - Is the tax equitable? Have the concerns of potential opt -out communities been adequately addressed? A brief review of the law helps to put these issues in context. STATUTORY HISTORY AND AUTHORITY Prior to 1983, the MTC was required by law to levy a fixed mill rate (2 mills) on all property within the transit taxing district regardless of the level of service provided to each community. In 1983, the legislature authorized the MSC to establish a tiered or "feathered" property tax system by tying a community's transit tax levy to the level of transit service received. The MTC interpreted this legislation in such a way_that tax relief was provided only to commmunities eligible for the "opt -out" program. Some of t-ose communities had their mill levy rate reduced from 2 mills to 1.75 mills; others had their mill levy rate reduced to 1.65 mills. Several communities, however, were not satisfied with the MTC tax relief program. In response t) this, the legislature acted in 1984 to mandate further transit property tax relief according to the following formula: Level of Service Statutory Mill Rate full, all -day service 2 mills full peak and limited off-peak service 1.5 mills limited peak service 1.25 mills This formula incorporates what is referred to in this memo-ardum as "full feathering." The statutory formula is not, however, effective until the 1985 tax levy for taxes payable in 1986. The 1984 legislation also requires the Corr..iissioner of Revenue, beginning in fiscal year 1987 and thereafter, to reimburse the Board frxn the state s general fund for the amount of transit tax proceeds lost teca•ise of statutorily mandated tax feathering. There is no state reimbursement for tax relief the Board provides in the 1984 levy for taxes payable in 1985. Because the 1984 legislation is not yet effective, the 19A4 tax levy is primarily controlled by Minn. Stat. `i473.446, subd. 1 (:upp. 1983), which provides: Subdivision 1. Taxation within transit taxing district. For the purposes of sections 473.401 to 473.451 and the m°tropolitan transit system, except as otherwise provided in this subdivision the metropolitan transit commission shall levy each year upon all taxable property within the metropolitan transit taxing district, definel in subdivision ?, a transit tax consisting of: (a) An amount up to two mills times the ass ssed value of all such property, based upon the level of transit se —ice provided for the property, the proceeds of which shad be used for payment of the expenses of operating transit and paratransit service,