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Rep. Peppin’s bill would lessen unfair fiscal disparities tax burden on Rogers

Wednesday, April 3, 2013

Rep. Peppin’s bill would lessen unfair fiscal disparities tax burden on Rogers

ST. PAUL—State Representative Joyce Peppin, R-Rogers, today announced that her bill to stabilize the Metropolitan Fiscal Disparities Program (HF 1601) will be heard in the House Tax Committee on Thursday, April 4. The intent of the bill is to lessen the unfair tax burden on fiscal disparities contributor cities like Rogers. Rogers City Administrator Steve Stahmer is scheduled to testify in support of the bill.    

The Fiscal Disparities Program was established in the 1970s in an effort to redistribute some of the benefits of commercial expansion in the seven-county metro to areas with less growth. Over time, and without real reform, this municipal redistribution of property tax capacity has created extreme financial burdens on cities in the northwest suburbs such as Rogers.

“This outdated program shifts millions in property tax base from communities like Rogers to Anoka and Ramsey counties, and results in higher property taxes for our families. That’s not right,” Peppin said.

Peppin explained: “My bill seeks to create fairness for local taxpayers by establishing a payment cap for cities, like Rogers, that do not benefit from the Metropolitan Council’s wastewater infrastructure, a core service that originally was promised to benefit participating municipalities.”

The City of Rogers is the hardest hit of all 180 participating cities and townships, and it does not benefit from the Met Council’s wastewater services. As a result, the municipal tax rate is much higher than it would be because the city loses approximately 15- to 20-percent of its total tax base to this program on a net basis. As a result, the city’s home and business owners pay a significantly higher share than those in communities that receive fiscal disparities dollars.

“Forty years ago, fiscal disparities might have been a good idea in an effort to equalize property tax capacity across the metro area. But since that time, we’ve seen phenomenal commercial and industrial growth in Anoka and Ramsey counties and these areas have benefitted immensely from that growth. We no longer need to take tax dollars from cities like Rogers and give to cities in Anoka and Ramsey counties. At the end of the day, families in the northwest suburbs deserve fairness when paying their taxes. My bill will help take the first step in that direction,” Peppin said.

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