Association of Minnesota Counties says it was not in favor of tax credit ending
WILLMAR -- The Legislature's elimination of the Homestead Market Value Credit is causing concern for taxpayers and concern for local government entities who could be facing big crowds during annual truth in taxation hearings this year.
The credit gave property owners a break on taxes, with the state paying the difference to local governments.
The state eliminated the credit in this year's budget deal, and it was replaced with a new homestead "exclusion." The homestead exclusion eliminates the state payments and instead has the local taxpayer paying the full load to local governments, although a portion of the market value of properties will be reduced.
Many county and city leaders have said local property taxes will increase because of the change.
But some area legislators have said the elimination of the homestead credit does not mean local taxes should increase.
In a recent news release, Sen. Joe Gimse, R-Willmar, said he disagrees with the claim that increased property taxes will be automatic "because I believe it is up to local government officials to decide how much spending is needed to balance their budgets."
He wrote that, "Property taxes are local and during these extremely difficult economic times, our local officials will have to re-examine spending priorities."
It may be easy to blame tax increases on local officials, but the decision to eliminate the homestead credit was not made by local officials, who are, nonetheless, left with the responsibility of finding a way to balance the state shift within the local budget, said Jeff Spartz, executive director of the Association of Minnesota Counties.
During comments Tuesday to the Kandiyohi County Board of Commissioners, Spartz said it's difficult for the public to understand the role counties play when it comes to raising taxes and cutting services in order to meet state mandates -- at the same time when the state reduces local funding.
Gimse, as well as Rep. Greg Davids, the GOP chairman of the House Tax Committee, said counties and cities actually asked for the homestead credit to be eliminated because the state's payments were not consistent and were rarely paid in full.
When Commissioner Richard Larson asked specifically if the Association of Minnesota Counties endorsed the elimination of the homestead credit, Spartz said "no."
During legislative meetings, Spartz said the association told legislators that if something had to be cut, the homestead credit would be the least objectionable reduction as long as other program funding was preserved.
"But we didn't advocate cutting it," said Spartz. "We didn't endorse it."
Spartz said the Association of Minnesota Counties, along with municipal and education organizations, are working together to provide accurate and consistent information about the tax change that is easy for the public to understand.
But Spartz said even a number of legislators "didn't realize the implications" of their vote to eliminate the credit and he said efforts are under way by some lawmakers to reinstate it during the next legislative session.
Given the state budget, which he predicted will only get worse, Spartz said that could be difficult to do.
The Kandiyohi County Commissioners also questioned Spartz about the association's role in lobbying for increased funding, fines and fees to help control the spread of aquatic invasive species, such as zebra mussels.
Annalee Garletz, who handles environment issues with the Association of Minnesota Counties, said funding was the focus this year and policy issues will be the focus next year.
Commissioner Dennis Peterson said he hoped the association will take a more active role in legislative efforts to increase penalties for violating laws that could spread invasive species.
Garletz said invasive species are a priority for the Association of Minnesota Counties and she asked the county to provide specific requests to include in the association's policy positions on the issue.
In other action Tuesday:
- The County Board approved 2012 fees for immunizations and health and safety inspection services provided by the county's Public Health Department. The fee schedule includes modest increases of $10 to $20 in many cases.
Fees for inspecting swimming pools and manufactured home parks took a big jump in order to compensate for the actual time invested. It currently costs $130 for pool inspections. In 2012 it will cost $250. The base fee for inspecting manufactured home parks will go from the current rate of $30 to a new rate of $105.
Immunizations will increase from $10 for the first dose to $15. Additional doses will increase by $2 each.
- To reflect the increasing size of the Green Lake Sanitary Sewer and Water District, the commissioners approved a resolution to increase the size of the governing board to 11 members. New members will represent new communities, including lakes, that are now part of the system.
- The commissioners gave final approval for conditional use permits to Margaret Dokken for commercial storage units in Colfax Township and Hiko Ritz for a Verizon/AT&T tower in Kandiyohi Township, and approved amendments to the zoning ordinance.
- The commissioners agreed to eliminate one of four employee insurance plans and replace it with a Voluntary Employees' Beneficiary Association health savings account -- a type of trust fund allowed under the tax code for providing employee benefits. The change will save county taxpayers money and help keep insurance premiums in check, while asking employees to pick up a greater share of health care costs. For the first time in many years, county health insurance rates will not increase in 2012.
- A Safe Community grant of $24,061 was accepted from the state for education and enforcement efforts by the Sheriff's Office.