8.5. SR 04-17-1995 - Laserfiche WebLink

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Freeze, continued from page 1 government goods and services. • unlike the levy limits imposed during the 1970's and 1980's, this levy ]imit would apply to all cities. Cities could only exceed this limitation if the voters approve the excess increase. The bill would also receal many provisions of the school aid and local government aid system including LGA and HACA effective for 1998. The gislative Commission on Planning and Fiscal Policy would study the issue of property tax reform and make recommendations by January 1, 1997. After almost five hours of discus- sion and debate on Tuesday, the Senate Tax Committee approved the bill on a 12 to four party line vote. During the committee discussions, several amend- ments were added to clarify restrictions on the issuance of new debt These amendments allow new bond issues as long as the overall levy of the city would not increase. Senate Mce's litmus test for each amendment required that no amendment increase Those who voted for the property tax freeze Anderson Metzen Beckman R.D. Mce Berglin Mondale Bertram Morse Betzold Murphy Chattdler Novak Chmielewski Pappas Cohen piper Finn - Pogemiller Flynn 2'rice Hanson Ranum Hottinger Reichgott lunge Janezich Riveness DJ.lohnson Sams J.B. Johnson Samuelson Krentz Solon Kroening Stumpf Iangseth Vickemtan Lessard wiener property taxes for taxpayers in 1996. Other amendments included a provi- sion for the St. Paul school district to issue bonds to complete a high school and a provision restricting levy increases for unfunded police and fire .pension liabilities. The list of people testifying included numerous representatives of cities, schools, and counties. Mimtetonka Mayor Karen Anderson, Ely Mayor Frank Salerno, and League Executive Director Jim Miller testified on behalf of the League of Mincesota Cities in opposition to the bill. Mayor Karen Anderson told the committee that city levy increases from 1994 to 1995 were modest when compared to the levy decisions of other local units of government. Orr average, city levy increases for 1995 were slightly less than five percent statewide. Total levy for ail local government increases average 6.3 percent for the same period. Mayor Anderson also told the committee that nearly 30 percent, or 245 cities either froze their payable 19951evies or actually reduced them below the 1994 certified levels. Those who voted against the property tax freeze Belanger I.immer Berg Many Day Merriam Dille Neuville Frederickson Oliver D.E.Johnson Olson Johnston Ourada Kelly paziseau Kiscaden Roberson Kleis Runbeck Knutson Scheevel Kramer Spear Iaidig Stevens [,arson Terwilliger Lesewski Mayor Frank Salerno of Ely insisted that the loss of local control was a major city concern. He testified that state legislators must not trust or respect local officials if they are offering legislation such as the freeze. Mayor Salerno stated that the city councils and mayors may not be necessary if the legislature continues along this path. League Executive Director Jim Miller summarized a brief survey conducted by the League about the impact of the property tax freeze. According to responses from city officials, cities would have to cut services, delay infrastructure projects, and even forego state and federal grant money requiring a matching local contribution. Miller presented the survey results as an analysis of unintended consequences of the property tax freeze legislation. Al- though the committee seemed inter- ested in the presentations by the League of Minnesota Cities representa- tives, the bill was still ultimately passed. Other testifiers included Dan Elwood, City Manger of Spring Valley and President of the Minnesota Association of Small Cities, Tim Flaherty, lobbyist for the Coalition of Greater Minnesota Cities, and Richazd Fursman, City Administrator, Andover. % It's important to note that the property tax freeze is not yet law. It has simply been approved by the Senate. Will the bill become law? The property tax freeze proposal has tremendous political overtones. If ultimately vetoed by the govemor, he could be blamed by the DFL for all property tax increases in 2996. Ott the other hand, the balance of this Senate DFL budget proposal would restore the governor's proposed $77 million of aid reductions to cities and counties. If the govemor demands a restoration of his $220 million excess budget reserve, aid reductions could still occur. Hold onto your budgets for the next six weeks. [~6i ~:~ Page 8 LMC Cities Bulletin