LGA Special Session Request by Mayors

Minnesota mayors ask for a special legislative session to address property tax relief and local government aid

Request comes after release of levy data for 2008; average tax hike is
more than 9%

(November 15, 2007—St. Paul, Minn.) A group of Minnesota mayors from League of Minnesota Cities member cities led by Steve Cook of Hutchinson, R.T. Rybak of Minneapolis, and Richard Lehmann of Bemidji today asked Gov. Pawlenty and state legislative leaders from both the Senate and House to consider convening a special legislative session within the next few days.

The purpose of the special session would be to address provisions of an omnibus tax bill, vetoed during the 2007 regular session, which would have provided more than $120 million in property tax relief, including the restoration of $70 million in local government aid (LGA) and more than $30 million of direct homeowner property tax relief in 2008.

At a press conference held this morning, the mayors cited data released late last week in a report issued by the Minnesota Department of Revenue as a catalyst for the request. That report showed a rate increase in the city portion of property taxes levied across several Minnesota communities for 2008—an average of more than nine percent, but as much 20 percent or more in 122 cities. When county and school levies are added, property taxes could rise as much as $549 million.

Additionally, the mayors indicated that they had held meetings with the Governor and key legislatives leaders over the past several weeks about the possibility of a special session, and expressed a wish to continue the momentum of those discussions.

“A few days after we met, Governor Pawlenty sent each of the mayors a letter stating that he is not inclined to call for a special session at this time,” said Mayor Cook. ”We remain hopeful, however, that action can be taken quickly to provide property tax payers relief before the end of this calendar year. Waiting until the next regular legislative session to address these issues offers little help for Minnesotans in 2008.”

In addition to the three mayors that spoke at today’s event, other mayors who participated in the meeting with the Governor included Jeff Backer from Browns Valley, Joyce Ballard from Mahnomen, Ardell Brede from Rochester, Robert Byrnes from Marshall, Kevin Chapdelaine from Newport, Chris Coleman from St. Paul, Tom Kuntz from Owatonna, Chuck Novak from Ely, and Gary Zellmer from North Mankato.

Along with the restoration of LGA, the bill included other tax relief measures including modifications to the homeowner circuit breaker program that would provide $32.6 million in tax relief, and increases in county program aids (+$13 million) and township aid (+$5 million). Combined, the tax bill would have provided $120 million in tax relief to taxpayers across the state of Minnesota. The mayors pointed out that the provisions they are asking for are "self-funded"; paid for through another provision of the tax bill that would generate approximately $125 million from a proposed change in foreign operating corporation (FOC) tax rules.

“Besides providing some immediate tax relief, restoration of LGA would help cities continue to fund basic services like public safety,” said Cook. “All of the provisions that we have talked about today were in the original tax bill, including the FOC tax rules, and none were controversial at the time the bill was debated and vetoed earlier this year.”

“The League of Minnesota Cities has a long-standing policy supporting the full funding of LGA,” said League Executive Director Jim Miller. “We believe that the fiscal health of Minnesota cities relies on a productive state-local partnership that doesn’t place the burden of funding local services solely on the shoulders of local property tax payers.”

The League of Minnesota Cities is a non-profit, membership organization dedicated to promoting excellence in local government with effective advocacy, expert analysis, and trusted guidance for all Minnesota cities. The League serves its more than 830 members through advocacy, education and training, policy development, risk management and other services.

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