Taking property off the tax roles will have consequences for taxpayers
by the Minnesota Association of Townships
An open letter to Legacy Amendment Supporters acquiring additional land:
Recently, a series of editorials attacking provisions in the Omnibus Legacy Funding Bill, the House Omnibus Tax Bill, and other pending legislation, as anti-environment and anti-Legacy Amendment, have appeared in newspapers across the State. At least one media personality has blasted these provisions on radio. Unfortunately, none of these editorials, nor any member of the media, even acknowledged the concerns of those supporting the unduly maligned efforts intended to protect local government tax base and guard against substantial shifts in tax burdens to the remaining taxpayers.
Most land acquired using Legacy Amendment or similarly dedicated revenues, is removed from the tax rolls. Counties and townships, however, must still provide road maintenance, emergency medical, search and rescue, and other public services to the acquired properties. In fact, in many cases, the local costs are increased because of more people utilizing the State-acquired lands. The result is a shift of tax obligation to the remaining property owners.
Critics point to the Payment-In-Lieu-Of-Taxes (PILT) program as making local governments whole for lost taxes. PILT payments generally do not fully cover the lost taxes, particularly at the township level. Some counties may be compensated slightly above a property’s tax obligation in the early years of the six-year cycle for assessing tax values of acquired lands, but by the end of the cycle, things level off and the value of PILT slips below the property’s tax obligation. There is also no guarantee the Legislature will authorize PILT payments every year, particularly in an amount equal to the lost taxes.
The Minnesota Association of Townships (MAT), in partnership with the Association of Minnesota Counties (AMC), has been working on the provisions of the House Omnibus Tax Bill that create a Trust account financed by a payment at the time land is acquired, using Legacy or similar funds. Counties and towns would receive annual payments in an amount equal to the lost taxes, no more and no less, and the State’s General Fund would not be further strained. Until the issue of dependable compensation holding local governments and their taxpayers harmless for lost taxes is resolved, which the Trust Account approach achieves, alternatives such as no net-gain of state-owned property, or no net-loss of tax base policies, will continue to be discussed, as alternatives for counties and townships.
Opponents of such efforts are quick to argue that those who voted for the Legacy Amendment did not think it would be used to pay property taxes. We would argue they really did not think it would result in increased property taxes. County and Township officers hunt, fish, and use public lands. But they also recognize the need for balance and fairness, especially when it comes to having to levy property taxes.
We would ask that supporters of the land acquisitions, work with us on solutions that may be mutually beneficial to cover these lost tax funds for the local governmental jurisdictions and so that local taxpayers do not have to pick up the extra burden!
