House Property and Local Tax Division’s report moves on to taxes committee

Several cities and towns saw their financial prospects improve on Monday when the House Property and Local Tax Division approved its report to the House Taxes Committee.

Sponsored by the division’s chair, Rep. Diane Loeffler (DFL-Mpls), HF2348, as amended, would provide an increase of $147.4 million in property tax aids, credits and refunds for the 2020-21 biennium. It would also restore tax and bonding authority for 12 cities to the levels that appeared on their ballots last November when local residents approved increasing sales taxes to pay for municipal projects. But the amended bill also warns towns that earmarks from the referendums must be very specific.

Most of the changes to HF2348, introduced Friday and approved at Monday’s meeting came from an author’s amendment. For eight cities, the amendment removed modified local sales tax provisions and replaced them with their original bill language. Having their full complement of referendum-approved sales and use taxes and bonding authority restored under the bill would be Duluth, Two Harbors, Avon, Blue Earth, Cambridge, Elk River, Glenwood and International Falls.

Other cities affected by the amendment are Scanlon (which had the $400,000 that a 10-year sales tax would raise replaced by the same amount of Local Government Aid from the state); Willmar and Worthington, which had their referendums approved, but were asked for more detailed resolutions; and Sauk Centre, which would receive the full $10 million approved by voters under the condition that it be limited to Trunk Highway 71 reconstruction.

Nine other amendments were proposed. Four were adopted, one defeated and four withdrawn. Approved changes involved cleaning up requirements for applicants to the senior citizens’ property tax deferral program; those issuing rent certificates; and disabled veterans or family caregivers applying for property tax exclusions.

Also adopted was an amendment that would extend tax increment financing for the Bloomington Central Station project an additional five years.

Defeated on a voice vote was a proposal to remove definitions involved in municipal bankruptcies.

The Senate Taxes Committee continues to hear bills related to property and local taxes this week.