By Rep. Paul Anderson
There will be a special session of the Legislature, but it won’t deal with the issue of the sales tax expansion on farm repairs. Agreement could not be reached on an agenda that would look at tax issues, in addition to disaster relief for 20 counties in central and southern Minnesota. As a result, we will convene on the morning of Sept. 9 with the only item to be addressed being Minnesota’s match for federal FEMA dollars for those counties affected by heavy rain and storms in late June. I was disappointed that we won’t be taking up the sales tax issue during the special session, but there still seems to be considerable sentiment that it will be addressed early in next year’s regular session, which begins in February.
While on the subject of taxes, I read an account in the MINNESOTA FARM GUIDE of Gov. Mark Dayton’s recent speech at Farmfest, along with his meeting later that same day with the media. His Revenue Dept. commissioner, Myron Frans, later told reporters that, even though farmland values are increasing, many farmers are going to see reductions in property taxes next year.
His department is calling for approximately a 1.5-percent reduction statewide in property taxes next year, or about $121 million. I have talked with assessors who are saying that agricultural land will take another big increase in valuation for next year’s taxes. Keep in mind that our tax system and its valuation of property is about a year behind what is actually happening with the sale of property. Assessors look at the prior year’s arm-length transactions to come up with property values for the coming year’s valuation. So, even if land values have stopped their double-digit increases and have actually stabilized, we still have at least another year of large increases to work through the tax system. The entire process is complicated as assessors must also work with ratios of sales and other measurements as they seek to provide some statewide uniformity.
My concern has to do with ag land values taking another big jump in valuation for taxes payable next year in 2014. If the values for farm land are going to see a 20-percent increase, or even 15 percent, how are the taxes on that land going to decrease? We are talking about a 1.5-percent decrease in taxes payable statewide, so when these large ag land valuations are factored in, I really wonder about any actual lowering of farm land taxes. Is there going to be a shift in who pays those local taxes? Yes, because when the value of one portion of the proverbial three-legged stool that pays local property taxes goes up, in this case, ag land, and if the other two legs of that stool, commercial property and residential property, remain stable, there will be a shift in how those local taxes are paid.
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Stearns County lost an outstanding public servant recently with the passing of Commissioner Don Otte. Don served the western portion of the county with a passion for 14 years. He would always listen to his constituents’ concerns, and then act on those concerns to the best of his ability. Don will be missed by everyone who knew him. My sympathies to the family.
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