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<br />SJO .8 r
<br />
<br />Minnesota's
<br />Metropolitan Tax Pool
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<br />The Twin Cities and their suburbs will all share part of future growth
<br />in tax valuations, wherever it occurs in their area. By Paul Gilje.
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<br />The offer: Your city will receive, in future years a guaran- and, therefore, will receive essentially a per-capita share.
<br />teed share of a part of the growth in tax valuation which The adjustment in shares because of low or high valuation
<br />will be occurring throughout your metropolitan area as a per capita will be, in effect, mainly an adjustment among
<br />whole. suburbs.
<br />The price: Your city must contribute, for sharing by aU An end result of tax-base sharing is, of course, a red is-
<br />.'ties in your area, 40 percent of whatever growth in com- tribution of tax r~venues, but the new law's primaribenefit,
<br />rcial and industrial valuation may occur in future years at least in the early years, will be its impact on urban
<br />within your own borders. development decisions. Partly for this, reason some officials
<br />This is Minnesota's new "insurance policy" for com- in Minneapolis and St. Paul, urgently needing additional
<br />munities in the Minneapolis-St. Paul metropolitan area. dollars now to finance municip'al services, were not overly
<br />(Chapter 24, Minnesota Legislature, Extra Session, Laws enthusiastic about the law, although most of them clearly
<br />of 1971.) see the long-term benefit.
<br />This new law guarantees every unit of government in Some examples of the law's impact on urban develop-
<br />the Twin Cities area - whether a city, village, township, ment:. ,~.
<br />school district, county, or special district - a share of 40 · Fiscal zoning, the deliberate use of municipal police
<br />percent of the region's future growth in commercial-indus- power to restrict certain kinds of development and encour-
<br />tdal tax valuation, regardless of where in the 3,000-square- ,. age others in order to fatten the local tax base, is no longer
<br />mile area the new commercial-industrial buildings will be-so important, because a cOIpmunity will benefit from new
<br />located. shopping centers and industrial plants outside its bor-
<br />For example, some of the valuation of a new shopping ders.
<br />~ter in Minnetonka Village or a new industrial park in . It helps tear down a barrier to more even distribution of
<br />~gan Township or a new skyscraper in Minneapolis will low- and medium-income housing throughout the region.
<br />be made part of the tax base of all communities in the Some communities have been reluctant to permit such
<br />metropolitan area. housing because, they say, it doesn't "pay its own way" in
<br />There will still be winners and losers, but the differences property taxes. What this means is that such housing brings
<br />won't be as great because no longer for the Twin Cities area in more children to educate, but doesn't bring along enough
<br />is the rule of the urban development game "winner- tax base to finance their education, thereby increasing the
<br />take-all." tax burden on other people in the community. The new
<br />Each community's share of the 40 percent will be deter- law changes all this becau~enow more people moving into
<br />mined mainly by its population, but if its total local prop- the community will mean a larger share for that com-
<br />erty valuation per capita is below the metropolitan average munity from the 40 percent of the region's growth in com- .
<br />per capita, it will receive a larger share, and if above mercial-industrial tax base being pooled and redistributed.
<br />average. a smaller share. . It aids environmental protection. No longer will it be
<br />In the Twin Cities metropolitan area the extremes of necessary to allow development on marginal land, such as
<br />valuation are between suburbs, not between the central . floodplains, simply to create an adequate tax base within a
<br />cities and the suburbs. Minneapolis and St. Paul both are community. Communities can adopt rational open-space
<br />very close to the metropolitan average valuation per capita protection plans without fear of "eroding" the tax base.
<br />· It most assuredly will be an asset in the planning and
<br />decision-making on major metropolitan facilities, such as a
<br />second new airport, metropolitan transit lines, new free-
<br />
<br />,'P.aul A. Gilje is. research director of the Citizens League
<br />and a former Minneapolis Star reporter.
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<br />CJIY/FALL 1971 49
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