By Rep. Paul Anderson
Part of the massive tax bill passed by the Legislature in the closing days of the session was an exemption from most sales tax payments for cities and counties in Minnesota. Townships currently enjoy the exemption, so when this new law goes into effect, most units of local government will not be paying sales tax on their purchases to the state. I have long been in favor of eliminating this form of "double taxation," and in fact authored a bill in the House to do just that.
What surprised me was that, in addition to the sales tax relief, local governments were also given a bump in their Local Government Aid (LGA) payments. Nearly all cities and towns in Minnesota receive LGA, while counties get what’s called County Program Aid, and both categories will see increases when the new fiscal year begins in July. The formula used to determine those payments has also been changed, and going forward, it favors large cities and the older suburbs around Minneapolis and St. Paul. Under the old formula, about 70 percent of LGA payments went to Greater Minnesota, while under the new plan, that ratio shifts closer to 50-50 between rural and metro areas.
It’s going to be interesting to see how local officials handle these changes in tax policy and LGA payments. The changes are promoted as items that will allow local taxpayers to save money because, in theory, property taxes should be lowered because of the savings from the sales tax modification and the increased state aid in the form of LGA. In the past, changes such as these have not always resulted in property tax reductions because, if local spending was increased, taxpayers might not have seen reductions on their property tax.
"BUY THE FARM"
An amendment added to a bill on the final day of session will have implications for several families in our area. The so-called "Buy the Farm" bill was passed, and hopefully it will help those families who are trying to work with the power companies in selling their property that’s in close proximity to the new Cap-X power line being built through central Minnesota. The original bill has been around for many years, but this new amendment adds several timelines to the process. A lawsuit pertaining to the same topic is currently before the state Supreme Court, and the result of that is also expected to have a bearing on how this law works going forward.
MEMORIAL DAY
The Memorial Day holiday week end is here as summer activities start to gear up. Please attend a Memorial Day service in your city as we honor those who made the ultimate sacrifice in defending our country. I will be in Brooten Monday, taking part in the Memorial Day program in that city. We take many of our freedoms and privileges for granted, but it was those who took up the call-to-arms who made possible all those things we enjoy today. Thanks to our veterans for preserving our freedom and making the United States of America the greatest nation in the world.