01-14-1985 Council Packet - Laserfiche WebLink

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REVENUE SOVHCF.S PROPOSP.0 POLICIES RS-2. PROPERTY TAX REFORM (..) In >nacting an) major reforms of the Minnesota property tax system, the Legislature should ensure that the following conditions are met: 1) The impact of the proposal has been thoroughly analyzed not only from a statewide perspective but also in terms of its impact on indiv±dual rnmmim i r i o. 2) There should not he major shifts in the relative relationship of tax burdens between taxine jurisdictions. 3) All significant changes should he phased in so that cities can adequately plan for any needed adjustments. 4) Property tax reform should not jeopardize existing development districts whose establishment and financing was based on continued maintenance of the current tax structure. Any tax reform needs to recognize existing tax increment finance districts and their cash flow and obligations as outlined in their tax increment financing plan. Impact on enterprise zones must also be addressed. 5) Local government aid should he maintained as an essential component of the property tax system. (See the separate policy on local government aid for the League's position on this.) 6) If the net individual homestead tax bur,!(-n is increased, the state dollars freed up should lie u:.ed for property tax relief such as the circuit breaker. Changes in the circuit breaker application procedure should then be implemented so that qualify U property owners are able to meet their tax obligations without increasing delinquency rates or jeopardiz—g their cash_ flow to the point that their ability to get or maintain mortgage financing with tax escrow accounts is jeopardized. 7) Simplification and accountability are desirable goals that should be addressed within the above tenets. Many significant changes to the overall property tax system are currently being considered. Because no specific proposals had been put forward during the development of these policies the league has developed some general criteria to consider in evaluating any tax reform proposal. It is very important that any proposal be evaluated on the basis of its impact on individual communities. A proposal that appears balanced on a statewide basis can have a very diverse impact on individual cities. The disparity or difference in property tax burdens among taxpayers in neighboring tax jurisdictions should be kept within acceptable limits. Any imposed disparities could have a significant impact on the ability of cities to compete on a fair basis with each other for residents or economic development. Tax increment districts are dependent on the mill rate and assessment ratios of the current property tax system. The financial viability of those project-, 41