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Property Taxes, State Funding & Fiscal Issues

Funding of city government operations in Minnesota is derived primarily from property taxes and state aids and credits, including local government aid (LGA). The League provides a variety of resources to help cities and others understand complex state-aid formulas, trends in state funding and property taxes, and a host of other fiscal issues.
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State budget balanced—for now
During the 2010 legislative session, which ended May 16, Gov. Pawlenty signed into law a supplemental budget for the remainder of the current biennium that includes further cuts to city aids and credits. On May 17, the Legislature went into special session to finalize a budget-balancing bill, which the governor signed.
Read the latest news about the state budget

Related resources:

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2010 Tax base information now available
Each year the League prepares several documents describing trends in property taxes and city finances. The 2010 property tax report and property tax data will be published in Minnesota Cities magazine in September. A supplementary document, the 2010 city-by-city listing of market value and tax capacity composition is now available. The listing provides tax base composition data for all Minnesota cities in terms of both market value and tax capacity.

Total market value for all cities statewide stood at $401,144,949,756 for taxes payable in 2010. This is a decline of 3 percent over 2009. Two classes of city property—farm and other (includes manufactured home park land, bed and breakfasts, and golf courses)—increased in 2010 (12 percent and 3 percent, respectively. Homestead, non-homestead residential and commercial total market values all fell in 2010 (5 percent, 1 percent and half a percent, respectively). Just over one-third of cities experienced a decline in total market value. Changes in statewide tax capacity were similar with the total tax capacity down almost three percent from 2009.

Access the 2010 tax capacity composition report and previous LMC property
tax reports

Access more property tax resources
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Revenue recapture authority for cities
Under 2008 Session Law chapter 154, cities are given more general authority to contract with the Department of Revenue (DOR) to collect certain unpaid debts (article 16, section 6). Cities had a limited use of this tool prior to passage of this legislation. Now cities can use the tool for such debts as unpaid taxes, interest and penalties on the unpaid taxes, criminal and petty misdemeanor fines, and court-ordered restitution. The new authorization makes changes to Minnesota Statutes, section 270A.
Learn more about revenue recapture from the Department of Revenue web site
View the form to contract with the DOR for revenue recapture (pdf)
View a DOR fact sheet about revenue recapture (pdf) ___________________________________________________________________________

Tax increment financing (TIF) decertification
TIF is a tool for economic development. When TIF districts are decertified, it can affect a city's tax base and LGA distribution.
Read more about TIF Decertification
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Property Tax Calculator
Our Property Tax Calculator is an interactive tool that allows users to compare cities with each other and over time.
Access the Property Tax Calculator
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View other key League resources

LGA resources

Property tax resources

City budgeting resources