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City of Ramsey 16153 NOWTHE~N BOULEVARD N,W,, RAMSEY~ MINNESOTA 55303 · (612) 427.1410 April 12, 1985 Mr. Mark Anderson Minnesota Association of Commerce and Industry 480 Cedar Street St. Paul, MN 55101 Dear Mr. Anderson: The Ramsey Eoonomic Development Commission is very concerned with MACI'$ position regarding tax reform as it addresses only income taxes. The City of Ramsey ~s like many other small Minnesota co~unities with many small businesses making up its .commercial and industrial tax base. Property taxes on ~all buslnesses are a major probl~, much more so than ino~me taxes. As a resul.t of Minnesota's "circuit breaker" and other homestead legislatlon, Minnesota businesses carry a greater share of the property tax burden. This is shown in enclosure 1. During a period of economic decline, income taxes do not present a probl~ to ~all businessmen as these taxes are based on ino~me, but property taxes must be paid regardless of the business.climate. This situation also creates a problem for lending institutions involved with small businesses. When a s~all business fails, the lending institutions are saddled with those property taxes until the property is sold. ~nerefor, this leads to reluctance on the part of lending institutions to become involved with oommercial and industrial real estate. Ramsey has one agricultural manufacturing business that has failed during the latest recession and o~nsequently, its lending institution is n~ paying $21,000 annually in property taxes until the property can be sold. In response to this, Ramsey business people formed the Ramsey Business Association in 1980 to try to bring this issue to the public, but the plan backfired and Ramsey gained the reputation as being a place of high taxes. This hindered any economic develolmm, nt in Ramsey.