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School districts benefit from new ag property tax credit for school bonds

Minnesota Department of Revenue Commissioner Cynthia Bauerly speaks Tuesday, Sept. 26, 2017, about the new Beginning Farmer Tax Credit and School Building Bond Agricultural Credit at a forum held at Dilworth-Glyndon-Felton High School. David Samson / Forum News Service

GLYNDON, Minn.—A 40 percent property tax credit for owners of agricultural land could be key to getting Dilworth-Glyndon-Felton School District voters to approve a school bond issue, Superintendent Bryan Thygeson said Tuesday, Sept. 26, in opening a tax forum at the high school.

More than 60 percent of the district's land is agricultural, Thygeson said.

"This was a piece of legislation that was absolutely critical for us," he said.

State Revenue Commissioner Cynthia Bauerly, state Reps. Paul Marquart, DFL-Dilworth, and Ben Lien, DFL-Moorhead, and Sen. Kent Eken, DFL-Twin Valley, all praised the School Building Bond Agricultural Credit, part of the tax package approved by Minnesota lawmakers this spring.

Bauerly said $35 million was set aside to pay for the tax credits, which will apply to current and future school bond issues.

She said agricultural landowners in the D-G-F district, Moorhead and the rest of the state will see the credits show up in their November Truth-In-Taxation notices.

The credit will "help communities come together" for future school building construction, she said.

"I don't think we can overstate the importance of this to the community," Marquart said of the ag tax credit he helped author.

Marquart said the tax breaks will make it easier for rural communities to build state-of-the-art facilities to match those in the seven-county St. Paul-Minneapolis metro area.

"I think a rural Minnesota student should have the same access to a world-class facility" as a kid in a metropolitan area, Marquart said.

"This is a good deal. This is a very good deal" for greater Minnesota and farmers, Lien added.

He said he believes the state can do more to lower property taxes, though how much will rely on the November revenue collections report.

Eken called the agricultural property tax break "a major step in the right direction."

Eken said he'd like to see the state pick up a greater share of the burden of rural school construction costs, but "this will go a long way" to addressing rural building needs.

Revenue Commissioner Bauerly, a Concordia College graduate, said a Beginning Farmer Tax Credit will also help young people looking to get into farming. The credit provides incentives for existing farmers to rent or sell land to new farmers.

Clay County Commissioner Frank Gross said he definitely was a fan of the ag property tax credit.

"I think it's going to be a great thing," Gross said.

"We're trying to get a bond passed (in the D-G-F school district)." Gross said. "It's going to help everybody in the community ... by helping the farmers."

D-G-F voters overwhelmingly rejected a $31 million school construction and renovation bonding plan in November 2015.

District officials then started the process over, vowing to make sure that it could not be criticized for not being transparent or failing to include opponents in discussions.

Thygeson said the school board voted Monday, Sept. 25, to have district staff begin planning for a school bond referendum.

A $23 million plan recommended by a district tax force in November 2016 will likely go before voters in November 2018, Thygeson said. The costs are roughly split between new construction, renovations, and security upgrades for the Dilworth and Glyndon school buildings, and long-term facilities maintenance.

"There's a lot of steps left, we know that," Thygeson said. "It's a great next step."

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