Levy limits for local governments

Local units of government could find their ability to raise levies curtailed.

“For me to carry a levy limits bill, it’s something I thought I would never do. I wasn’t a big fan of levy limits,” Rep. Greg Davids (R-Preston) told the House Property and Local Tax Division Feb. 1.

He sponsors HF1911 that would permanently impose levy limits on local units of government beginning with payable 2013.

Last year the Legislature re-crafted the market value homestead credit, leaving some communities with less state aid. Davids said while most local governments “acted responsibly” and did not raise their levy, approximately $413 million was raised by others who “went overboard.”

The division took no action on the bill, which Davids called a “work in progress.”

The bill, which has no Senate companion, would allow a local government’s levy limit to grow by 1.9 percent annually. However, for the first year (2013) a local government’s limit would be equal to the greater of its pay 2011 or pay 2012 levy increased by 1.9 percent.

Keith Carlson, executive director of the Minnesota Inter-County Association, said the bill is the wrong message to local officials.

“Levies are the lowest in decades. The number of cities and counties that froze their levies was extraordinary,” he said.

A provision requiring a local government to get voter approval before issuing new debt or entering into long-term purchases and lease agreements drew the support of some Roseville residents.

Joy Anderson, president of Responsible Governance of Roseville, said that when a city borrows money through a special taxing district for a project, it most likely does not need voter approval. Her organization went to court seeking a referendum on a city project.

“It is ridiculous that residents are now forced to litigate in order to prevent their city government from exploiting loopholes in laws” and spending thousands of taxpayer dollars on projects, she said.