Minnesota House of Representatives
Public Information Services

Menu

Public Information Services Menu

House property tax proposal leaves cities behind, but helps business

By Lee Ann Schutz

House Republicans are proposing over $302 million in property tax relief over the 2018-19 biennium – but it’s far from a done deal.

HF603, as amended, was laid out Monday for the House Property Tax and Local Government Finance Division. Public testimony is to be taken Monday night with the bill expected to be voted on Tuesday. If approved, it would be sent to the House Taxes Committee where it could be rolled into an omnibus tax bill.

Rep. Steve Drazkowski

Sponsored by Rep. Steve Drazkowski (R-Mazeppa), the bill includes several provisions included in last year’s omnibus tax bill that was vetoed because of a wording error that could have cost the state millions of dollars. The companion, SF802, is sponsored by Sen. Rich Draheim (R-Madison Lake). It awaits action by the Senate Taxes Committee.

The signature provision in the bill aligns with one of the governor’s priorities: property tax relief for farmers who carry a large share of the cost of school district bonding projects. While the governor proposes $34 million in help, the House is asking for $10 million more.

Other proposed property tax relief in the bill would:

  • exempt the first $200,000 of commercial-industrial property from the state general tax and freeze the tax at the 2017 level;
  • provide property tax relief to renters and homeowners in the form of a refund payment for 2019 only; and
  • create a reduced class rate for congressionally charted veteran’s services organization.

Gov. Mark Dayton and the House part ways in several areas, most notably with how they treat local government aid.

The governor proposes a $30 million increase to beef up the “essential services like police and fire protection.” However in the House bill, LGA, as well as County Program Aid, are absent. The bill would also penalize local governments that make a payment toward efforts to bring the world’s fair to the state and to so-called “sanctuary cities” who’ve enacted a local ordinance that prevents a police department from asking crime victims or witnesses for their immigration status.

Revenue Commissioner Cynthia Bauerly. House Photography file photo

Dayton’s efforts to increase water quality by the use of buffer strips and help farmers with aid payments is also mute in the House bill.

Differences in the tax proposals did not go unnoticed by Revenue Commissioner Cynthia Bauerly, including a sales tax construction exemption on materials used to build a proposed $150 million Minnesota United FC soccer stadium near the intersection of Interstate 94 and Snelling Avenue in St. Paul, as well as a permanent property tax exemption for the site. Both are included in the governor’s tax bill but not the House bill.

Most concerning, she said, is the wide variance between tax relief proposed for commercial industrial property owners and that available to homeowners and renters.

Bauerly said about 30 percent of renters credit recipients are seniors and people with disabilities. “While in the first year there is a credit provided, over the long-term it will be a net reduction for these people.”  Businesses, on the other hand, would receive a substantial, ongoing cut, she said. “Over time, this will disproportionately benefit large building owners such as IDS and the Mall of America.”

Other bill provisions would:

  • authorize several communities’ uses of tax increment financing to support workforce house projects;
  • prohibit local governments from imposing a fee or tax on merchant-provided plastic or paper bags;
  • modify existing local sales taxes;
  • prohibit use of public money for a passenger rail project between Rochester and the Twin Cities; and
  • repeal the political contribution refund. 

Search Session Daily

Recent Dailies

House passes measure to require licensure of abortion clinics

Providers of abortions could need a license from the state to operate. A new licensure progra...

Ending state funding for abortions gets House OK

State-sponsored health programs administered by the Department of Human Services would not be abl...

Expanding autism-related benefits heads to governor’s desk

The House on Monday approved a bill that would extend and expand benefits to people with autism a...

Public hospitals could see fewer investment restrictions

Public hospitals would be able to invest more broadly under provisions of a bill passed 120-11 by...

House passes bill with aim to provide greater access to dental care

Some dental hygienists and assistants might be able to provide services in schools, long-term car...

'Starting Line': How do you save for the future?

Saving money for a comfortable retirement can be challenging. Not everyone has the financial wher...

Minnesota Index: Immigration in Minnesota

Estimated number of 2014 Minnesota residents who were born in foreign countries         428,000 ...

Week in Review: April 17-21

When lawmakers return Monday, they will have four weeks to work with Gov. Mark Dayton in crafting...

$61 million and plenty of policy separates House, Senate state government bills

A committee of 10 legislators – five from the House, five from the Senate – began working Friday ...

Public Information Services  ·   175 State Office Building, Saint Paul, MN 55155   ·   Public.Information@house.mn