Agenda - Council Work Session - 02/27/2018

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Municipal Revenue & Taxation would contradict the purposes of the program. Metro Cities recognizes that laws enacted in the 2013 legislative session to assist the expansion for the Mall of America were not in accordance with Metro Cities' legislative policy on fiscal disparities. This law should not serve as a precedent for future legislative action with respect to funding specific projects or programs out of the fiscal disparities pool. Legislation that would modify or impact the fiscal disparities program should only be considered within a framework of comprehensive reform efforts of the state's property tax, aids and credits system. Any proposed legislation that would modify or impact the fiscal disparities program must be evaluated utilizing the criteria of fairness, equity, stability, transparency and coherence in the treatment of cities and taxpayers across the metropolitan region, and must continue to serve the program's intended purposes. Metro Cities opposes legislation that would allow for capturing and pooling growth in residential tax capacity to fund specific programs or objectives. Further studies or task forces to consider modifications to the fiscal disparities program must include participation and input from metropolitan local government representatives. 1-J Constitutional Tax and Expenditure Limits Metro Cities strongly opposes including tax and expenditure limits in the state constitution. This would eliminate any flexibility on the part of the Legislature or local governments to respond to unanticipated critical needs, emergencies, or fluctuating economic situations. When services such as education, public safety and health care require increased funding beyond the overall limit, experiences in at least one other state indicate that other publicly funded services receive less than adequate resources. Constitutional limits result in a reduced base during times of economic downturn and the inability to recover to previous service levels when economic prosperity returns. 1-K State Property Tax The state levies a property tax on commercial/industrial and cabin property. Since cities' only source of general funds is the property tax, Metro Cities strongly opposes extension of the state property tax to additional classes of property. Metro Cities opposes using the state property tax to fund specific programs or objectives generally funded through state income and sales tax revenue. In the interest of increasing transparency, Metro Cities supports efforts to have the state provide information on the property tax statement regarding the state property tax. Metro Cities opposes exempting specific classes of property under the tax as such exemptions shift the costs of the tax onto other classes of property. 1-L Class Rate Tax System 2018 Legislative Policies 5