Agenda - Council - 05/27/1980 - Laserfiche WebLink

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Bond code amendments. The League supports amendments to the bond code and tax laws that will clarify the authority of local governments and assist them in obtaining credit. Tax-exempt property One of the glaring inequities in the Minnesota tax system involves local services that are pro- vided free to tax-exempt property owned or used by the state, counties, regional governmental bod- ies, 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 ser- vices provided by cities. Since there is no legal basis, however, for claiming reimbursement for the cost of such service, they are borne by the local taxpayers. Furthermore, such property is concentrated in certain cities, resulting in a heavy cost burden upon those cities. The League recommends that this problem be corrected by enacting legislation requiring predom- inantly state-supported, county, regional govern- ment, and non-governmental owners of tax-exempt property to reimburse cities for the cost of these services. The legislature should also consider reimburse- ment to cities for services provided to all state- owned land and facilities, including state univer- sities, and for services provided to constitutionally protected houses of worship, including parsonages, private grade schools, high schools, and colleges, and property use solely for educational purposes by academies, colleges, universities, and semi- naries of learning. Assessme n t equalization Unequal property assessment both within and among the various taxing jurisdictions is becoming a major problem of property tax equity in the state because of the increasing use of and reliance on sales ratio measures as factors in aid formulas and the complexity of overlapping taxing juris- tions including special districts. The following proposals are suggested to remedy the inequities created in the past few years. To ensure equity among various over- lapping taxing jursidictions and for state aid purposes, the legislature should devel- op a penalty provision for ad valorem taxing jursidictions which do not achieve a reasonable sales ratio. In addition, the penalty provision developed by the legis- lature should apply to the local unit which has the responsibility for assessing (i.e. the county where the county assessor sys- tem has been adopted or the city where responsibility remains at the local level). The League recommends that a more com- prehensible assessments system be estab- lished. Electric utility gross revenues tax A gross earnings tax should be levied on all private electric utilities (excluding municipally owned) with gross revenues in excess of $5 mil- lion annually, in lieu of property taxes on electric utility facilities. The gross revenues tax should be established at a percentage rate which will yield no [ess than the total property taxes paid by all affected utility companies in the most recent year for which such figures are available. The League recommends that the resulting revenues be distributed as follows: (1) any city or town could decide to receive as its share an amount equal to its property tax receipts from electric utilities for the most recent year such figures are available; and (2) the remainder should be distributed on the basis of the electric utility re- venues collected within each municipality. With- in each affected city and town, all local govern- ments levying a property tax should share in the distribution of such revenues in proportion to the taxes levied. The municipalities electing to receive the property tax equivalent should receive this amount only so long as the specific property is used for utility purposes. Any municipality which is the site of a future major utility generating facility or other installation should receive addi- tional compensation to reflect additional muni- cipal costs resulting from the installation. Also, wholesale purchases of electricity by municipal electric utilities should be taxed, and those cities that operate such utilities should re- ceive a share of the distribution on the same basis as other cities. If. the Board of Directors of the League deter- mines that there is a better means of capturing a significant amount of revenue from electric -4-