By Rep. Paul Anderson
A bill that I authored had its first hearing in the House Tax Committee last week. The measure would exempt cities and counties from paying the state sales tax on most of their purchases, basically the same exemption given to townships two years ago. The law requiring local units of government to pay the tax was put into effect in the early 1990s when the state was facing a budget shortfall. Given the choice of either losing substantial amounts of local government aid (LGA) or having the tax imposed on themselves, the local units endorsed the tax. At the time of enactment, the tax generated around $60 million in revenue to the state. Today, cities and counties contribute around $140 million in sales taxes to the state.
Most observers seem to agree that taxing local government is not a good thing. It’s adding a tax onto a tax because local revenues (raised by local taxes) must be sufficient to cover the expense of paying the sales tax to the state. It’s also a cycle whereby the state gives local governments revenue in the form of LGA, but then turns around and taxes those very same units.
There is an added concern this year about taxing local units if Gov. Mark Dayton’s sales tax expansion becomes law. Many of our smaller cities and counties contract out for such things as auditing, engineering, and assorted legal services. Under the governor’s expansion plan, all of these services would be taxable, adding a sizeable additional tax burden onto local governments. I checked with several cities in our district and Melrose, for example, would have an additional tax burden of around $18,000 if those aforementioned services were taxed at the proposed lower rate of 5.5 percent.
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I attended an informational gathering with DNR personnel last week where a variety of topics were discussed. The lawsuit against the wolf season in Minnesota is ongoing, but there appears to be no inclination to stop the hunt. Another topic discussed was the controversial “point restriction” in the southeast deer hunting zone that’s been in effect the past three years. The restriction is an effort to produce bigger bucks as none could legally be taken in that area with fewer than four antler points on each side of the rack. The original restriction was for a three-year period, so without further authority to extend it, the plan has expired. There are strong feelings on both sides of this argument, and it wasn’t clear how the DNR will proceed on this subject.
Also discussed was a topic that I have brought up for several years pertaining to an earlier goose season in Minnesota. It seems the local Canada goose population, after staying here all spring and summer eating farmers’ crops, takes wing and, for the most part, leaves this area right before the current early season, which starts around Labor Day weekend. It must have to do with moving on to other feeding areas, because it seems to happen every year. I have been told that establishing the timeframe for migratory hunting seasons rests with the federal government, and we couldn’t have an earlier season. Now, however, the feds have given states an option to establish what they call a “conservation action,” which would allow states to have an earlier season. Both North Dakota and South Dakota already do this, so I raised the issue once again. Informational hearings will be held this spring, and there is a good possibility of an earlier season, at least here in west Central Minnesota.
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