Possible utility tax resolution

A new bill raised some old gripes March 17 in the House Taxes Committee. The governor’s tax bill, HF3967, is sponsored by the committee’s Republican lead, Rep. Dean Simpson (R-Perham).

The bill includes the governor’s solution to the utility tax rule change, an issue that spurred intense debate over a tax bill earlier this session. Republicans said the governor would veto the DFL solution, and the Senate later removed the provision entirely.

The governor proposes a two-year transitional aid for cities that lost 5 percent of their tax base from the rule change. Rep. Sandy Wollschlager (DFL-Cannon Falls), who sponsored the provision that was stripped from the last tax bill, said the governor’s proposal was “piecemeal,” and she would like to see a different solution.

A discussion resurfaced in the March 14 meeting of the House Property Tax Relief and Local Sales Tax Division about the governor’s proposed changes to levy limits.

The proposal would change how levy limits are calculated and could decrease operating budgets for cities that receive local government aid, said Rep. Paul Marquart (DFL-Dilworth).

Revenue Commissioner Ward Einess said the governor insists that the measure would equalize property tax rates across the state.

“He is a sincere believer that the only tool for holding down property taxes is a levy limit,” he said.

Other proposals include a decrease in the renters’ tax credit; a proposal to search bank account information for delinquent taxpayers; an extension to some contracts in the JOBZ program; an abolition of the political contribution tax credit; and a decrease in the state sales tax.

The companion bill, SF3665, sponsored by Sen. Julianne Ortman (R-Chanhassen), awaits action by the Senate Taxes Committees.