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Minnesota Legislature

Covering revenue shortfalls

Published (2/20/2009)
By Sonja Hegman
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Local units of government could have another tool to use in times of economic distress.

HF686, sponsored by Rep. Ann Lenczewski (DFL-Bloomington), would give cities, counties and towns the authority to issue emergency debt certificates to finance unexpected revenue shortfalls during the fiscal year. It was laid over Feb. 18 for possible inclusion in the House Property and Local Sales Tax Division’s report.

The bill came about as a result of Gov. Tim Pawlenty’s December unallotment of state aid payments, which occurred after local levy limits had already been certified. Because they would be used in only emergency circumstances, the certificates would be issued without voter approval. Certificates would have to be paid off within two years of the end of the fiscal year that they were issued.

“This is just another tool to help them get some relief,” Lenczewski said.

Gary Carlson, director of intergovernmental relations for the League of Minnesota Cities, said this bill was an alternative to allowing the recertification of local levies in January, something that has never been done before. He also stressed that any circumstances would have to be unforeseen to issue the certificates.

“I hope no one has to use this,” Carlson said. “But we would like to have a safety net in place.”

A companion, SF520, sponsored by Sen. Tom Bakk (DFL-Cook), awaits action by the Senate Taxes Committee.

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