The new law requires supplemental notice of proposed property taxes as part of the truth in taxation process, beginning with taxes payable in 2023.
On July 1, Gov. Tim Walz signed the Omnibus Tax Bill (Chapter 14, First Special Session) into law. Included in Chapter 14 is an amendment to Minnesota Statutes, section 275.065, Minnesota’s “truth in taxation” process. This new law becomes effective for property taxes payable in 2023 and thereafter.
What’s included in the new law
The law creates a requirement for county auditors to produce a new one-page information sheet that must be included with the parcel-specific notice of proposed property taxes that will contain three pieces of information:
- The current certified levy for the county, city or township, and school district, the proposed levy for taxes payable the following year by those entities;
- The increase or decrease between those two amounts, expressed as a percentage; and
- Select summary budget data for the county, city or township, and school district for the current year budget as well as for the proposed budget.
What’s not included in the new law
Based on concerns raised by the League and other local government organizations during committee hearings, the new law does not include several components of the original bill, HF 496, such as the requirement for cities to establish a citizen’s property tax advisory committee or the unified Minnesota Property Taxpayer’s Day hearing requirement. The effective date of the new requirements was also delayed until the next year, when local governments are preparing their 2023 budgets.
What the new law requires cities to do
Cities with populations of at least 500 must report the summary budget data to the county auditor on or before the time they certify their proposed levy, which has a statutory deadline of Sept. 30. Cities under 500 in population are specifically exempt from reporting the summary budget data.
The reported summary budget data must contain the same information, in the same categories, and in the same format as provided to the Office of the State Auditor as required by Minnesota Statutes, section 6.745 which includes:
- Governmental revenues, including and separately stating:
- “Property taxes” defined as property taxes levied on an assessed valuation of real property and personal property, if applicable, by the city and county, including fiscal disparities;
- “Special assessments” defined as levies made against certain properties to defray all or part of the costs of a specific improvement, such as new sewer and water mains, deemed to benefit primarily those properties;
- “State general purpose aid” defined as aid received from the state that has no restrictions on its use, including local government aid, county program aid, and market value credits; and
- “State categorical aid” defined as revenues received for a specific purpose, such as streets and highways, fire relief, and flood control, including but not limited to police and fire state aid and out-of-home placement aid; and
- Current expenditures, including and separately stating:
- “General government” defined as administration costs of city or county governments, including salaries of officials and maintenance of buildings;
- “Public safety” defined as costs related to the protection of persons and property, such as police, fire, ambulance services, building inspections, animal control, and flood control;
- “Streets and highways” defined as costs associated with the maintenance and repair of local highways, streets, bridges, and street equipment, such as patching, seal coating, street lighting, street cleaning, and snow removal;
- “Sanitation” defined as costs of refuse collection and disposal, recycling, and weed and pest control;
- “Human services” defined as activities designed to provide public assistance and institutional care for individuals economically unable to provide for themselves;
- “Health” defined as costs of the maintenance of vital statistics, restaurant inspection, communicable disease control, and various health services and clinics;
- “Culture and recreation” defined as costs of libraries, park maintenance, mowing, planting, removal of trees, festivals, bands, museums, community centers, cable television, baseball fields, and organized recreation activities;
- “Conservation of natural resources” defined as the conservation and development of natural resources, including agricultural and forestry programs and services, weed inspection services, and soil and water conservation services;
- “Economic development and housing” defined as costs for development and redevelopment activities in blighted or otherwise economically disadvantaged areas, including low-interest loans, cleanup of hazardous sites, rehabilitation of substandard housing and other physical facilities, and other assistance to those wanting to provide housing and economic opportunity within a disadvantaged area; and
- “All other current expenditures” defined as costs not classified elsewhere, such as airport expenditures, cemeteries, unallocated insurance costs, unallocated pension costs, and public transportation costs.
If a taxing authority reporting this data does not have revenues or expenditures in any category, then the taxing authority must designate the amount as “0” for that specific category.
The law does not have any specific penalty for failure to comply. If a city with a population over 500 fails to report the required information to the county auditor, the county auditor must list the city as “budget information not reported” on the portion of the statement dedicated to the city’s budget information.
The new requirement also specifies that upon request of the taxpayer, the county must send the supplemental statement in an electronic form or by email.