The ability for cities to ensure infrastructure accountability with new development is one step closer to being law.
The House Government Operations Committee on March 12 passed HF 2296 (Rep. Brad Tabke, DFL-Shakopee), a League-supported bill that provides necessary statutory authority so cities can equitably collect fees for future infrastructure improvements.
This was the last committee stop, so the bill is headed to the floor for a vote by the full House.
City and township testifiers
Several local government representatives testified during the hearing. Dayton Mayor Tim McNeil said that without this bill, the existing tax base would be left to pay for street improvements that are only needed because of incoming development.
Cities should have the local flexibility to collect infrastructure development fees to fund municipal street improvements as a necessary component of growth. They should not be forced to make existing taxpayers pay for streets that would not be needed if it weren’t for development. Dayton is in a particularly difficult position, as the city is over 90% residential.
Rochester Policy Analyst Heather Corcoran said that Rochester has been in limbo since the Harstad v. City of Woodbury court decision. This uncertainty has impacted funding considerations of the city when it comes to future development-related infrastructure.
Minnesota Association of Townships Staff Attorney Karl-Christian Johannessen also testified in favor of the bill.
The Municipal Legislative Commission, Metro Cities, and North Metro Area Mayors also supported the bill with a joint letter of support.
Opposition to infrastructure accountability
Housing First Minnesota (formerly known as the Builders Association of the Twin Cities) testified in opposition to the bill, saying that this fee would be a new “tax.” The statutory authority that is being sought is not a tax, simply a mechanism for development to pay for development-related infrastructure.
There was also a joint one-pager in opposition that called for cities to use other funding tools, such as property tax increases, special assessments, state transportation aid, special service districts, tax increment financing, property tax abatement, or local option sales tax.
Some of these options are not viable for funding all street improvements related to incoming development, while other options still require the existing property tax base to pay for infrastructure that would not need improvement if it weren’t for the development. The number one suggestion from these opponents was to increase property taxes; this is precisely the situation the legislation wants to avoid.
The League encourages cities to contact this committee’s members and urge them to hear the bill.