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LOCal N°rthern States. Power Tax
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<br />BaSes Threatened By 'Outside Forces
<br /> '~ Accordingly,' the synopsis sor such as General Mills does
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<br /> By, JakeJ .ac0beoi ~ A synopsis of' the study,
<br /> · ' prepared by tim Minnesota De- ' recomm~..ds that, .for tax, .~r..- not pay property taxes on their
<br /> A study due to be presenMd paflment, of Public Serv~e_. poses, utilities nlm non-rarity manufacturing equipment.
<br />to the Minnesota legislatme makes the following conclu- businesses be treated similarly. They do pay taxes on their real
<br />Jantmry lStlk 1997 could lead sions and recommendations: If that same conclusion is estate.
<br />to lel~slation that would rednce 'In Minnesota. ~ttilittes areranched by the Public Utili- Another example is a local
<br />state utilttim: taxes by approxi- a~e~ed taxm tim do not ap- ties/Dupe, of Revenue/Dept. of manufacturer that pays taxes on
<br />mately two-thirds, or more, ac- ply to* non-utility businesses. ' Public Service combined study, their real estate, but not on their
<br />cording to Sheflmme __County /'here co~t~ place utilities at a a recommendation could result manufacturing equipment.
<br />Tax Assmmor'fy Bischoff. '. competitive disadvantage m in legislation to change state A third example is a home.
<br />The teduotlun' would be ~ ..m,epe~. on .to rate/my- taxing laws and exeml~ utilities hold. Homeowners pay real es-
<br />caused by a potent_iai change in from paying taxes on their tare taxes based on the value of
<br />state tax laws that would no ' ~ "FrancAise ' fe~.,' ar~ equipment. . . their real estate, but Mt on the
<br />Ion--' allow personal property, theoretically collected to o, orset , In Minnesota, utilities are value of their homehold goods.
<br />or. rating eqnipment owned the tpec/.J~ cost~ /reposed by unique in that they cunently Locally, the tax bases most
<br />by tne utilities, to be taxed.. * sttilitles, yet are smm/ly treatedpay real es~,e taxes, plus taxes affected would be the City of
<br />It is being spearheaded by*, no di, Orerently from other on their g~erating equipment Becket, the Becket School Dis-
<br />three agencies that have con-* i ~ ttmrces of revemte and lint in as part of their tax load. trice, the City of Monticello, the
<br />ceres about utilities competing l the feneralfund. . ' The main issue is whether Monticello School District,
<br />In a free rnarke~lnce, ns the re-:: 'The personal property tax. or not utilities should continue Wright County and Sherbume
<br />suit of pending deregulation..: ) a tax assmted only on ~ttilitim to pay taxes on their inside County.
<br />The Minnesota Depamnent in the 8tare at'Mtnnesata, is es- eqmpment, which is classified Both Wright and Sherborne
<br />of Public Service and the Pub- .'sentially an additional, Aiddon by most businesses as pemonal Counties Imve NSP power
<br />iic Utilities.. Commission hns' tax on cam'matra, property and therefore, non- plants that currently pay a sub-
<br />been assisting the Depamnent ~incret~inf competition in taxable.
<br />of Revenue in dra~ing a cam- the e/ectr/c indmtry wfl/exac- ..' For example, - Sherburne stantial portion of overall real
<br />erbate the problems of an 'sm- County Tax Assessor Ty Bisch- estate taxes.
<br />prehemive study of utility taxa- even playing.field for mflitim. '" off explains that a food prnces- NSP fo p~ ?.
<br />tiaa-
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<br /> ~ In Sberbume County, taxes
<br />from the NSP plants located in
<br />Becket' helps the county share
<br />of real estate taxes Iow, com-
<br />pared with counties that have
<br />no power plants. ·
<br />
<br />In Becket, the NSP plant**
<br />pays about 94 percent of the_
<br />city*tax load, a ~ portion
<br />which goes toward pa~
<br />long-term bonded indebtedness.
<br />
<br />city has incurred in recent
<br />
<br />Bischoffsays personal prop* located in the city now pays T_nmi 1996 Current Vnlun-. implementation of the new role
<br />erty, or equipment at the Beck- about a 94 percent share of all ainu nf 3 Beek~ NSP Plants ' for one more year.
<br />er NSP plant,, now makes up. city taxes .... :.... ..... .,: *... ,.~*
<br /> .
<br />for 70 percent of their total val- Om, tuffy, the three NSP. Real Estate $128,423,000 '~* . ~
<br />uation. ' plants located in the City of
<br /> The Minnesota Department Becker, Sherco I, !I & 1II, sit ~ ~ ~
<br /> Tax. $615,296,500 ~,~ ,:
<br />of Public Service has pointed on 621.44 acres of property, : · · , ~.i
<br />out that the eight large utilitiesvalued at $3,200,600. ~Cs~rren~' ~
<br /> three plants are valued
<br />cent higher than other corpora- Related Tax base Thren~s
<br />tions, due to their status as at $125,222,400. The 1996 val-* Another current issue relat. **
<br />utilities. . u~.fl.o.n ofth. e. insi.de equi. pm.ent, lng to lost utility tax base In.
<br /> ,,,,If ~thei~,. persona:.,, property_,,, which ,W.omn.no. m..ong~ oe tax.-**valves constnnt q ~ehnn~m
<br />
<br />paying ~axes more :ndne ~.- ~roven, m ~4?o,~!J:=~...,,-. · A tree chenge last year mat
<br />p~to~t~riSe" "'~' '~ .... ~+' ~,~Bischo~ ma:d if ~.taW m goes into effect in Pay, !~, '
<br />..~ a~ment to change the ¢~ be will m~me. mr It to will tnke ~out $13 million dol-.,.~ '
<br />taxing sm, cture is that state- not ~o into effect ng~ a,.way, im off ~ ~he~ume
<br />wido, consmnem of electricity "U~fortunataly," he sm~ t.eg- tax rolls and a
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<br />~ ?'-~:~? i~-~: ~ -- - - - ' '~'~ '~''; *:' '; ~'' ~' ".~[l~l~ f~ I
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<br />have their electrical rates raised islators from other arens don't amount from Becker City.
<br />artificially because of the cur- traditionally have a lot of sym- The difference will be made
<br />rent City and County taxing of .patby for lax rich cities." - up by combined contributions
<br />pmsonal property installed at Because the change would from individual and commer-
<br />power plants. . have a ne~.t. Jve financial effectcial taxpayem. * ·
<br />Ifthnt provision is chenged, on the existing financial status. Such changes are not always
<br /> of taxes
<br />the ratio paid by power of all Minnesota cities that host predictable.. "They do occur
<br />plants to cities where there are power plants, he expects there from time to time and about all
<br />located would change propor- would~be an organized lobby we can do is to try and modify
<br />tionately, said Biechoff. effort al~aiust any proposed them," said Sherborne County
<br /> For example, in Becker, the changes m utilities' tax status, Assistant Attorney,. Kathy
<br />NSP/Soutbem Minnesota Pow- or for a modification.of any Hsaney.
<br />er electrical generating facility proposed new law. '.." in this instance, Hsaney was
<br /> · able to accomplish puttin~ off
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