01-14-1985 Council Packet - Laserfiche WebLink

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RS-10. TAX-LXE.MPT PRO-ERTY (C) State, county,-.chool district, cite, regional government, and other owners of tax-exempt property (except houses of worship) should be required to reimburse cities for the cost of police, fire and street services. One of the glaring inequities in the Minnesota tax system involves local services that ary provided free to tax-exempt property owned or used by the state, counties,-•chool districts, regional governmental bodies, and by certain non -governmental organizations. it is widely acknowledged that such property benefits directly from governmental. services such as police and fire protection and street services provided by cities. Since there is no legal basis, however, for claiming reimbursement for the costs of such service, they are borne by the local taxpayers. Furtherrore, such property is concentrated in certain cities, resulting in a heavy cost burden upon those cities. RS-11. ASSESSMENT EQUALIZATION (C) The Legislature should repeal the coefficient of dispersion penalty provision. The League opposes the sales ratio being used as a basis for either penalties or bonuses in state aid funds after the formula distribution has been determined. The League favors improved property assessment practices for numerous reasons. First, county, schoo: and special district levies overlap various city taxing jurisdictions. If the sales ratio of one city is lower than that of another city in the same county, the residents of the high -sales ratio city bear an unfair additional tax burden. Second, various state formulas consider property tax base valuation in distributing aid. Although sales ratios are used as an equalizing factor, sales ratios themselves are often flawed or inaccurate because of the difficulty of computing ratios. The recently adopted adjustments to reflect the effect of seller financing were a significant improvement but problems still remain. There may not be enough sales in a given class of property in an area to accurately determine a sales ratio. Also cities with diverse or unique properties have a much more difficult time assigning market values than more homogenou., communities. It is important to recognize that statistics such as sales ratios and coefficients of dispersion (which are calculated from sales ratios) are at best general indicators. They are tools for helping assessors and for insuring as equitable as possible distribution of state aids. However, they should not be used as precise measurements for additional penalties or bonuses of state aid funds once the distribution has been calculated. Coefficient of Dispersion Penalty For the past several years the deadline for the effective date of the statutory coefficient of dispersion penalty has been extended due to major problems in administering the law fairly. If the Legislature determines a need exists, the Comm sioner of Revenue should be required to order a reassessment of an art by an independent appraiser if indicators fall significantly below acceptable national standards. The costs of such reassessment should be borne by the responsible assessing jurisdiction. -46-