Rating property tax

Property tax proposals could be subject to a rating system in deciding their usefulness.

Sponsored by Rep. Denise Dittrich (DFL-Champlin), HF1261 is the result of a working group charged with creating benchmarks, critical indicators and principles for legislators to use when evaluating property tax proposals. The House Property and Local Sales Tax Division held it over March 17 for possible inclusion in its report to the House Taxes Committee. There is no Senate companion.

“We rewrote and reworked this several times and still consider it a work in progress,” Dittrich said.

The bill would also establish a 12-member property tax working group comprised of House and Senate members, various lobbying groups and the state’s revenue commissioner. The working group would make its advisory recommendations to the chairs of the House and Senate tax committees by Feb. 1, 2011.

“This is outstanding work,” said Rep. Paul Marquart (DFL-Dilworth), the division chairman. “There’s a lot of accountability here, which is what we wanted to do. It raises the discussion to a new level.”

Rep. Morrie Lanning (R-Moorhead) asked if local units of government could use the indicators to examine their own local tax effectiveness. Dittrich said local units were surveyed as to the kinds of tools they’d like the state to use, but “we did not look at that to the level you are talking about.”

“(The state) needs to monitor critical indicators, but I think local units of government need to do the same thing,” Lanning said.

Eric Willette, property tax analyst with the Department of Revenue, said that while he was supportive of implementing this scale, he had concerns. “I’m not exactly sure how it will work and how well it can be administered.” He said it would add responsibility to people in the department during the busiest time to year, but “we want to give it a try.”