Radio equipment sales tax might be retroactive for Kandiyohi, Meeker counties
WILLMAR -- Efforts to be treated like other counties who didn't have to pay sales tax on new emergency radio equipment could pay off for Kandiyohi and Meeker counties.
Earlier this month representatives from both counties testified at a Senate tax committee hearing asking that the Legislature make the sales tax forgiveness retroactive.
Before 2008, the state gave a sales tax exemption to 14 counties that purchased equipment for the new Allied Radio Matrix for Emergency Response System -- known as ARMER.
New legislation would have given that exemption to counties who purchased equipment after June of 2010.
That left counties, such as Kandiyohi that has had its system running for a year, in a black hole.
Kandiyohi County Administrator Larry Kleindl told the Kandiyohi County Board of Commissioners on Tuesday that language had been included in the Senate tax bill that would make the exemption retroactive to July 1, 2006.
So far that language has not been added to the House bill, Kleindl said, and there's no guarantee it will be approved by the cash-strapped Legislature.
"We have a long ways to go, but it's a start," he said.
If approved, Kandiyohi County could see a refund of about $150,000 in sales tax. "It'd be a real plus for Kandiyohi County," Kleindl said, thanking Sen. Joe Gimse, R-Willmar, for his work on the revised bill in the Senate.
Meeker County would save about $175,000.
In other business Tuesday, Kleindl also told the commissioners the state has reduced by $514,694 the amount it will compensate the county for the market value credit.
Market value credits reduce the property tax burden of qualifying individual taxpayers, and the state reimburses the local taxing jurisdictions for that reduction in property tax revenue. In several recent years, however, the state has not fully reimbursed the local governments.
Kleindl said that the market value credit revenue from the state is used to run programs the county operates on behalf of the state and federal governments. The reduction in the amount from the state will be balanced by reducing staff, reducing road maintenance projects, cutting overtime and raising fees.
A decrease in the market value credit compensation could also mean Kandiyohi County taxpayers will pay more taxes in the future.
The commissioners were also informed that proposed legislation has been removed that would have forced counties to pay 100 percent of the cost for hospitalizing sexual predators in the state's sexual offender program if they'd been committed after July 1, 2009.
Kandiyohi County currently has seven individuals in the program and one that was committed after July 1.
It costs $320 a day to house individuals there. Some are kept there for the rest of their lives, which can cost hundreds of thousands of dollars.
A proposed option for rationed state funding included in the original bill was "slanted against rural counties," said County Attorney Boyd Beccue.
Even though the legislation is no longer in play this year, Beccue urged the county to "remain vigilant" because it's likely to be reintroduced next year. If it passes, the financial responsibility would be "devastating" to counties, said Beccue.