Plan raises sales tax, not property tax
ST. PAUL - Counties would get new taxing authority, local levy limits disappear and some charitable organizations would be relieved of paying property taxes under a Democratic tax plan unveiled Monday.
To make up for anticipated state aid reductions, the proposal allows counties to impose a 0.5 percent sales tax increase instead of raising property taxes.
Voters could attempt to remove a county's sales tax increase under certain conditions. Also, the plan removes property tax levy limits put into law in 2008 next year for cities and in 2011 for counties.
House Property Tax Chairman Paul Marquart, DFL-Dilworth, said the proposal would result in "very few" property tax increases and increases accountability to property taxpayers.
The proposal is part of House Democratic-Farmer-Laborites' plan to erase a $4.6 billion state budget deficit in a new two-year budget plan.
"It's how can we balance the budget while still trying to protect property owners, jobs and essential (government) services," Marquart said.
The plan is problematic in part because a sales tax increase in counties along Minnesota's border would leave businesses in those counties less competitive with neighboring states, said Rep. Pat Garofalo, R-Farmington, a property tax committee member.
Setting a limit on property tax increases is a better way to control property taxes, Garofalo said.
Levy limits are not effective, Marquart said, because local governments often set their levy at the cap, rather than at a smaller rate increase.
The committee will take public testimony on the bill today; the committee will vote on the bill Wednesday.
Green Acres passes
Lawmakers said they found a way to fix problems created last year in the Green Acres agricultural property tax program.
A compromise reached by House and Senate negotiators that saw its first floor vote Monday attempts to correct changes put into law in 2008 that prompted some landowners to consider selling agricultural land for non-farming uses.
Green Acres was created to help farmers keep property taxes down on land that, if developed, could be taxed at higher rates. The correction keeps property taxes at a lower agriculture rate, not higher developed-land rates.
The conference committee report creates a new Green Acres program called Rural Preserve that is intended to keep agriculture land where crops are not grown from being developed.
Some lawmakers, including Republican Rep. Steve Drazkowski of Wabasha, said the bill is an improvement over the 2008 Green Acres policy, but does not do enough for farmers.
The House approved the measure, part of a mostly routine tax bill, on a 130-3 vote. It awaits a Senate vote.
Federal aid sought
Minnesota soon could receive $130 million in federal aid to shore up its unemployment insurance account.
A bill that puts Minnesota into conformity with federal unemployment guidelines passed the Senate 63-1 Monday. Sen. David Tomassoni, DFL-Chisholm, said the funds would be used to pay unemployed workers' benefits. A similar bill awaits a House floor vote.
The state unemployment insurance account will run out of funds later this year or early 2010, when Minnesota will begin borrowing from the federal government to pay unemployment benefits, Tomassoni said. The $130 million infusion would delay that borrowing.
A rise in unemployment has prompted more requests for unemployment benefits.
Lawmakers want to designate a June day to honor Vietnam War veterans.
Senators on Monday unanimously passed legislation making June 13, 2009 "Welcome Home Vietnam Veterans Day."
The 60-0 vote followed House approval last week. The bill is headed to Gov. Tim Pawlenty's desk.
Free fishing considered
Irene Long likes to fish, but at almost 92 years of age finds affording a license tough.
"We would like to have the license even lower (price) or even none at all so we can all go fishing because we have such a wonderful time on the lake," she told a Senate natural resources committee Monday.
Thanks to Long's story, lawmakers are considering allowing Minnesotans 90 and older to fish without paying for a license.
"I wish a lot of grandmas could go," she said.
The angler, who lives on Lake Mille Lacs, showed committee members pictures of her with some of her prize catches, including a 28-inch walleye and a 54-inch muskie.
Ed Boggess of the Department of Natural Resources said the state has a long policy of opposing free licenses, but did not argue against the bill Monday. "Miss Long is a tough act to follow."
Boggess said 937 Minnesotans 90 and older bought fishing licenses last year. If the bill passes, he added, the state would lose $16,000 a year.
"This is a small reward for those who are 90-plus," Sen. Jim Vickerman, DFL-Tracy, said.
The committee will consider putting the bill in an overall game and fish measure.
Flood fight continues
Red River Valley lawmakers said their communities' fight against flooding is not over.
Rep. Morrie Lanning told the Minnesota House today that his hometown of Moorhead evacuated residents in one-third of the city amid rising floodwaters. Now the Red River slowly is starting to drop, he said, but a second or third crest is possible.
"Our flood crisis is continuing," Lanning said.
Rep. Paul Marquart, DFL-Dilworth, who represents other communities along the Red River, said the region needs to remain vigilant.
"We've got a long ways to go," Marquart said. "It's far from over."
Marquart said the state will have to provide flood clean-up assistance and additional funding to prevent future floods.
Gov. Tim Pawlenty toured the Moorhead area Monday, meeting with state and local officials and National Guard soldiers.