1995 Ktnflg Schee
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JOINT HOUSE/SENATE SCHOOL FUNDING & PROPERTY TAX REFORM SUBCOMMITTEE OF THE LEGISLATIVE COMMISSION ON PLANNING & FISCAL POLICY 1995 MEMBERS: Representatives: Senators: Ann Rest Doug Johnson Lyn Carlson Bill Belanger Kevin Goodno John Hottinger Alice Johnson Gene Merriam Alice Seagren Gen Olson Jean Wagenius Larry Pogemiller Ted Winter Ember Reichgott Junge }1b I)t~5 ktnflG Schee vel HOUSE SENATE SUBCOMMITTEE ON SCHOOL FUNDING AND PROPERTY TAX REFORM 1995 ('n IJ IT!) l Cf)p/76!" R _ [!(;/!-Jff, 'ji '\c( ' Iff !_,,~ MEMBERS 9/27 10/6 ,l.Qf~· 11/14 11/2,81 Rest, Ann (J P e fJ Carlson, Lyndon E.-' r;;;? fJ Goodno, Kevin ;J {) Johnson, Alice f) Seagren, Alice (:J p f Wagenius, Jean r'../') P Winter, Ted l//~'1 l} f Johnson, Doug ",,';/ / /' P Ii IP r, fi",./ Belanger, Bill P Hottinger, John /) f Ii" /J ('. f) ~! Merriam, Gene I l~) J Olson, Gen ,P t I n Pogemiller, Larry I~) P /) r Reichgott Junge, Ember f:? p ¥ ~. Scheevel, Kenric /l-:-,," r P IV t5? I3JJ f ~ d lUi-qJ "" 12Ii h'iJ , ~K)(,D HOUSE/SENATE SCHOOL FUNDING & PROPERTY TAX REFORM SUBCOMMITTEE 1995 Wednesday, September 27 10:00 AM Room 107 Capitol Friday, October 6 10:30 AM Room 15 Capitol Monday, October 23 7:00 PM Hastings High School Tuesday, November 14 7:00 PM Dululth City Hall Monday, November 27 7:00 PM St. Cloud Civic Center ROGERD.MOE MAJORITY LEADER Senator 2nd District Route #3, Box 86A Erskine, Minnesota 56535 Phone: (218) 574-2216 Senate Room 208, State Capitol State of Minnesota 75 Constitution Avenue St. Paul, MN 55155-1606 Phone: (612) 296-2577 September 22, 1995 MEMORANDUM TO: Senator Bill Belanger Representative Lyn Carlson Senator John Hottinger Representative Kevin Goodno Senator Doug Johnson Representative Alice Johnson Senator Gene Merriam Representative Ann Rest Senator Gen Olson Representative Alice Seagren Senator Larry Pogemiller Representative Jean Wagenius Senator Ember Reichgott Junge Representative Ted Winter One IR Senator-to be named One IR Representive-to be named FROM: '- JA (\:)\1\' Senator Roger D. Moe, Chairll.?' Legislative Commission on Planning and Fiscal Policy Irv Anderson, Vice-Chair ~. d- ' Legislative Commission on Planning and Fiscal Policy RE: House Senate Subcommittee on School Funding and Property Tax Reform The purpose of this memo is to confirm your appointment to the School Funding and Property Tax Reform Subcommittee of the Legislative Commission on Planning and Fiscal Policy. This Subcommittee will be used to provide a public forum for the discussion of various issues relating to property taxes and education finance. Please be advised that this subcommittee will be co-chaired by Senator Doug Johnson and Representative Ann Rest. The first meeting is scheduled for Wednesday, September 27th at 10:00 a.m. in Room 107 State Capitol. Thank you for your willingness to serve on this subcommittee. cc: Sen. Dean Johnson Rep. Steve Sviggum ~56 HOUSE SENATE SUBCOMMITTEE ON SCHOOL FUNDING AND PROPERTY TAX REFORM WEDNESDAY, SEPTEMBER 27, 1995 ROOM 107 CAPITOL 10:00 A.M. The following members were present: Representatives: Rest; Goodno; Seagren; Wagenius; Winter and Senators: Johnson, DJ; Belanger; Hottinger; Merriam; Olson; Pogemiller; Reichgott Junge; Scheevel Representative Rest, Chair, called the meeting to order at 10:15 a.m. She explained today is the first in a series of meetings to be held by the School Funding and Property Tax Reform Subcommittee of the Legislative Commission on Planning and Fiscal Policy. Representative Ann Rest and Senator Doug Johnson will chair the subcommittee which will be meeting for the discussion of various issues' related to property taxes and education finance. The membership of this subcommittee is as follows: Senator Doug Johnson, Co-Chair Representative Ann Rest, Co-Chair Senator Bill Belanger Representative LYn Carlson Senator John Hottinger Representative Kevin Goodno Senator Gene Merriam Representative Alice Johnson Senator Gen Olson Representative Alice Seagren Senator Larry Pogemiller Representative Jean Wagenius Senator Ember Reichgott Junge Representative Ted Winter One IR Senator-to be named One IR Senator-to be named Senator Johnson, Co-Chair, provided opening remarks and indicated the Subcommittee will be holding hearings around the state over the next couple of months. The Subcommittee will be meeting as follows: Friday, October 6 10:00 am Room 15 Capitol Monday, October 23 7:00 pm Hastings High School Tuesday, November 14 7:00 pm Duluth City Hall Monday, November 27 7:00 pm St. Cloud Civic Center. Keith Carlson, Senate Tax Committee, testified on Property Tax Trends 1988 to 1996. Using an overhead visual he detailed and clarified specific information of charts and graphs. Please see Attachment #1. Mr. Carlson responded to questions and provided clarification for the members of the Subcommittee. Steve Hinze, House Staff, testified on a report he distributed to the members of the Subcommittee entitled "House Research Simulation Report: Property Tax; 9/26/95", please see Attachment #2. Mr. Hinze reviewed specifics of· the hand-out and responded to inquiries from members of the Subcommittee. Representative Rest, Chair, indicated the Subcommittee would like to adjourn around 12:00 p.m. She introduced: Don Diddams and Pat Conley, representing the Association of Minnesota Counties. Please see Attachment #3, entitled "Association of Minnesota Counties - 'Property Tax Reform' ... " and various other literature. Mr. Diddams spoke briefly on taxes, state budgets and county revenue expenditures. Ms. Conley addressed the Subcommittee and gave an overview of the potential impact of federal budget cuts and the effect they could have on the counties. There was discussion on social service agencies in Minnesota, reductions in anticipated growth, levies, etc. Mr. Diddams and Ms. Conley responded to questions and inquiries from the subcommittee members. It was agreed the remainder of individuals on the Agenda for today would be willing to testify at an upcoming hearing. The meeting adjourned at 12:15 p.m. The meeting was taped. Respectfully submitted, Sue Larson HOUSE SENATE SUBCOMMITTEE ON SCHOOL FUNDING AND PROPERTY TAX REFORM September 27, 1995 10:00 A.M. 107 Capitol AGENDA 1) Opening Remarks· Senator Doug Johnson Representative Ann Rest 2) Recent Property Trends· Keith Carlson 3) 1996 Property Tax Projections . Steve Hinze 4) Effects of Federal Cuts On Future Property Tax Levies . Joel Jamnik, League of Minnesota Cities Tom Ehrlichman, City of Minneapolis Chuck Armstrong, City of St. Paul Gene Raineri, NAHRO Pat Conley, Association of Minnesota Counties Don Diddums, Association of Minnesota Counties HOUSE SENATE SUBCOMMITTEE ON SCHOOL FUNDING AND PROPERTY TAX REFORM September 27, 1995 \. 10:00 A.M. 107 Capitol AGENDA 1) Opening Remarks . VSenator Doug Johnson JRepresentative Ann Rest 2) Recent Property Trends ./Keith Carlson 3) 1996 Property Tax Projections .JSteve Hinze 4) Effects of Federal Cuts On Future Property Tax Levies . Joel Jamnik, League of Minnesota Cities Tom Ehrlichman, City of Minneapolis Chuck Armstrong, City of St. Paul Gene Raineri, NAHRO IPat Conley, Association of Minnesota Counties JOon Oiddums, Association of Minnesota Counties Steve Hinze, Legislative Analyst (296-8956) DESCRIPTION BASELINE: Preliminary Pay '95 ALTERNATIVE: Projected Pay '96: Final Omnibus Tax & Ed Finance Bills (Revised) This report compares property taxes payable in 1995 with projected property taxes payable in 1996, taking into account the property tax components of the final versions of the tax bill, the education bill, and the metropolitan livable communities bill, as enacted by the 1995 legislature. This simulation contains only slight revisions to the previous simulation, labeled 95F2. KEY POINTS • Overall, property taxes statewide will increase 5.7% from pay '95 to pay '96, according to the projection. The projected increase is 5.6% in the metro area and 5.8% in greater Minnesota. • Increases are projected to be fairly uniform across property types. Seasonal recreational is highest of the major classes at approximately 7%, followed by residential homestead and agricultural at just over 5%. Commercial/industrial taxes are projected to increase 4.4% statewide. Residential rental varies from 0.8% for apartments to 4.1% for residential non homestead. The simulations are estimates only. House Research strives to make property tax simulations accurate, but simulations are only approximations of reality. They depend upon judgements about how much local government officials will decide to levy, which are highly speculative. Generally the results are most accurate on a statewide level, and tend to be less accurate as the jurisdiction under scrutiny gets smaller. House Research Department . 600 State Office Building . St. Paul, MN 55155 . (612) 296-6753 House Research Simulation Report: Property Tax Page ii. ASSUMPTIONS: ALTERNATIVE: Projected Pay '96: Final Omnibus Tax & Ed Finance Bills (Revised) • Market values are estimates based on responses to a survey sent to all county assessors asking for rough approximations of percentage increases in property values by type of property. Some assessors supplied separate estimates for individual cities. • County levies are modelled based on each county's average growth rate of levy plus aid for the previous two-, three-, or four-year period, with some modification based on discussions with county officials in the largest counties. Projected aid amounts for county HACA, I· criminal justice aid, and family preservation aid were subtracted to arrive at net levy amounts, except that only two-thirds of the HACA cuts provided for in the tax bill were assumed to be levied back. No changes in county levies were assumed as a result of the metropolitan livable communities act. • City levies are modelled based on each city's two-year average growth rate of levy plus aid, limited to a maximum increase of 15% and a minimum of 0%, with some modification based on discussions with officials in the largest cities. Projected aid amounts for LOA and HACA were subtracted to arrive at net levy figures, except that only two-thirds of the HACA cuts provided for in the tax bill were assumed to be levied back.