89-597 WHITE - C�TV CLERK
PINK - FINANCE G I TY O. A I NT PA U L CO�I�IClI
CANARV - DEPARTMENT
BLUE - MAVOR File NO. _��� -
Counc l Resolution j�, ,
Presented By �
Referred To Committee: Date
Out of Committee By Date
WHEREAS, the current Truth in Taxation law, M. S. 275 .065 ,
places unreasonable burden o the City of Saint Paul ; and
WHEREAS, there is growing on ensus among state and local
units of government that t e ruth-in-Taxation law needs �o be
changed;
NOW, THEREFORE BE IT RESOL ED that the City of Saint Paul
supports the proposed chan es in the Truth-in-Taxation law.
COUNCIL MEMBERS Requested by Department of:
Yeas Nays
Dimond
��g In Fav r
Goswitz �
Rettman
Scheibel A gai n s t BY
Sonnen
Wilson
Adopted by Council: Date
APR — 6 h7W Form Approved by City Attorney
Certified Yas Council . retar BY
By
Approv y 1+lavor: Date � � -- Appco e y Ma r f Sub ' sion to Council
By �
PUBItSi� �+r k ], � 198
� l,Fp9-.sy7
BRIEFING PAP R: TRUTH-IN-TAXATION
Back�round
In 1988 the State Legislat re enacted sweeping changes in the
property tax laws . Includ d n the law is a
"Truth-in-Taxation" provis ' on The "Truth-in-Taxation"
provision has several impli a ions for local government:
l . The law requires local o ernments to submit to the county
auditor, by August 1 , p oposed budget and property tax
levy for taxes payable in the following year. To comply
with these requirements, he City must advance the start
of the budget process . I prior years, the Mayor' s �
Proposed Budget was due A gust 15 .
2 . If there is an increase i property taxes prepared by the
taxing authority, the 1 w requires the county auditor to
mail by September 15 a o ice to taxpayers . For each
taxing district, i .e, c" t , county, school district, the
notice will list ( a) t e amount of the person' s tax if
the taxing district doe ot change its proposed budget
from this year' s budget (b) the amount of the person' s
tax if the taxing distr' c s adopt their proposed budgets,
and (c ) the time and p a e of ineetings on the proposed
budgets.
3 . The law requires cities t advertise the public hearin� on
the budget by September l and to hold a public hearing
"for tax protesters" pr o to October 25 .
Status
There are efforts being mad a number of entities to effect
changes in the law. The Mi ne ota Department of Revenue , the
League of Minnesota Cities, Mi nesota Association of County
Officials and others are pr po ing changes. Several
legislators have agreed tha c anges will be needed.
The Minnesota Department of Re enue has proposed a process for
property tax to be assessed in 1990 and paid in 1991 . The
process with the deadlines s s follows:
Date Action
January 2 Assessment or properties established.
April 1 Counties pr vi e state with values of each
class of pr pe ty for each city and town.
June 1 State Board of Equalization determines final
property va ue and issues orders to change .
July 1 Assessors m il Notice of Change in Value .
page 2 �����
Date Action
July 15 - Propert o ners appeal values and class to
August 15 assesso s or Local Boards of Review if
meeting
August 1 Limits n roperty tax collections
certifi 'd y the state to cities, counties
and sch ol .
August 15 County oa ds of Equalization hear appeals
to deci io s of assessors or Local Boards
of Revi w.
September 1 Local g ve nments notify county auditors of
the amo nt of property tax they propose to
collect .
November 1 Counties m il proposed property tax bills
to prope t owners.
November 10 - Local go e nments begin hearings on
December 14 proposed b dgets.
December 15 Local go e nments determine amount of
property t x to be collected and notify
county a d' tors.
March 15 Property t x bills mailed to taxpayers .
The revenue proposal will d a tically alter the process
timeline. It is a more rea o able approach than current law.
The Saint Paul Position
The City of Saint Paul supp r s the following changes in the
"Truth-in-Taxation" law:
1 . The date for certifying p posed levies should be moved
from August 1 (current a date ) to mid-December in order
to allow local governme ts to make realistic budget
estimates for the comin ar.
2 . The Notice of Proposed ax s should indicate chan�es in
state-paid tax relief, nc uding transition aid, school
aid, local �overnment a d nd disparity aid. In addition,
tax statements should d sp ay the accurate value of
transition aid ( formerl h mestead credit ) for the
taxpayer.
3 . The Notice of Proposed ax s should display what the
taxpayer actually paid n he previous tax year compared
to the proposed tax for th following year. This should
replace the hypothetica c lculation of "no increase" and
"propsed increase" tax at s .
p ag e 3 i� l� ' `57�
4 . Local governments shou d e permitted to have more than
one public budget hear ng . More than one hearing may be
necessary to allow loc 1 overnments to hear public
testimony and make ame dm nts to their budgets .
5 . Current Truth-in-Taxat on law prohibits a local �overnment
from exceeding the ini ia ly proposed levy (certified on
August 1 ) . If this pr hi ition is retained, a process
should be created to p rm t a local unit to amend its
proposd levy to deal w' th emergency or unforeseen
circumstances or to re po d to opinion expressed at public
hearings supporting in re sing expenditures.
6 . The requirement for a 'ew paper advertisement will be
costly and should be e im nated since the Notices of
Proposed Taxes contain t e public hearing information.
7 . If an early levy certi ic tion date is retained and other
cumbersome requirements a e kept , then small cities should
remain exempt from the r cess .
8 . The state should reimbu s local governments for the costs
of implementin� Truth-i - axation. If not reimbursed,
these costs should be a l wed as a special levy outside of
levy limits .
9 . Once a workable Truth-i - axation process is in place,
levy limits should be a o ished.
• ' . � BRIEFING PAPE : TRUTH-IN-TAkATION ��f�-.�7 �
Bacl�around
In 1988 the State Legislatu e nacted sweeping changes in the
propertv ta� laws. Include i the law is a
"Truth-in-Taxation" provisi n. A copy of a portion of the new
law, M. S. 275 . 065 , is attac ed. The "Truth-in-Taxation"
provision has several impli at ' ons for local government:
1 . The law requires local ov rnments to submit to the count�-
auditor, by August 1 , a 'pr posed budget and property ta�
levv for taxes pavable ' n he following vear. � To comply
with these requirements t e City must advance the start
of L-he budget process . In prior �-ears , the Mavor' s
Proposed Budget was due Au ust 15 .
2 . If there is an increase in propertv ta�es prepared b�- the
ta�ing authoritv, the 1 w equires the count�° auditor to
mail bv September 15 a ot ce to taxpayers. For each
tatiing district , i .e , c ''ty count�•, school district, the
notice will list (a? t e mount of the person' s ta� if
the ta::ing district doe n t chan�e its proposed budget
from this vear' s budget ( 1 the amount of the person' s
ta� if the ta;�ing distr ' ct- adopt their proposed budgets ,
and tc ) the time and p ac of ineetings on the proposed
budgets.
3 . The law requires cities to advertise the public heariti� on
the bud�et bv September 15 and to hold a public hearing
��for tax proLester•s�� ��r � or to October 25 .
Status
Tl�iere are effor•ts Ueing n►ad b, a r�umber of entities to affect
chan�es in the law. The rii ne ota De1�artment of Revenue , the
Lea�'Lie of Minnesota Cities , �fi nesota Association of Counts�
Off'icials and others are pr Po ing changes . Several
le7islators have agreed tha c anges sYill be needed.
The *finnesota Department of Re enue has proposed a process for
property tax to be assessed in 1.990 arid paid in 1991 . The
process with the deadlines is s follows :
Date Action
Januar�� 2 Assessment f r properties established.
April 1 Gounties pro i e state with ��alues of each
class of pro �e t�.� f'or eac11 cit�� and to���n.
.June 1 Statc: L�oard f Equalization determines final
propert�� �rai ic- azid issttes orders to cha�l�e .
.I�_i.l_�- 1 Assessors mail Notice of C•Iian�;e in Val��c .
• ' •page 2 ��f �.:7�/
Date Action
July 15 - Propertv o n rs appeal values and class to
August 15 assessors '(o Local Boards of Review if
meeting ) .
August 1 Limits on pr pertv ta:�` collections
certified 'bv the state to cities , counties
an.d schoo s.
August 15 County Bo rd of Eqiialization hear appeals
to decisi 'ns of assessors or Local Boards
of Review
September 1 Local gov rn ents notify county auditors of
the amoun o propertv tax thep propose to
collect.
November 1 Counties ai proposed propertv tat bills
to proper v wners.
November 10 - Local gov r ments begin hearings on
December 14 proposed u gets.
December 15 Local �ov r ments determine amount of
propertv a. to be collected and notif�
county au i ors .
March l� Propertv a_ bills mailed to ta�;pa�-ers .
The revenue proposal will dr s icall�- alter the process
timeline . It is a more reas ri ble approach than current law.
The Saint Paul Position
The City of Saint Paul supp rt the followin� chanaes in the
"Truth-in-Ta}:ation" lac.:
l . The date for certif�•in' pr posed levies shotild be moved
from Au�ust 1 icurrent aw datei to mid-December in order
to allow local governme ts to make realistic budaet
estimates for the comin y� ar.
2 . The l�otice of Proposed a:c s should indicate chan�es in
state-paid tax relief , nc uding transition aid, school
aid, local �overnment a d nd disparitp aid . In addition.
ta� stateme�zts shou]_d d sp a�� the accurate valtie of
transition aid ( formerl h mestead creditl for the
taxpa�er.
3 . The Notice of Proposed a_'es should displati- c:haL the
ta�:pa��er actuall�- paid n the previous tati �-ear compared
to the proposed tas ior t:l e followin� �ear. Thi.s sliottld
replace the h�-pothetica a].culation of "�zo increase" and
"propsed i ncrease" ta� �a c:s .
� � .page 3 (./ O• ��
4 . Local governments shoul e permitted to have more than
one public budget heari g . More than one hearing may be
necessary to allow loca overnments to hear public
testimony and make amem m �ts to their budgets.
5 . Current Truth-in-Ta�ati n law prohibits a local government
from exceeding the init a ly proposed• levy (certified on
August l ) . If this pro i ition is retained, a process
should be created to pe ' m' t a local unit to �mend its
proposd levy to deal wi h emergenc�r or unforeseen
circumstances or to res o d to opinion e�:pressed at public
hearings supporting inc e sin� �xpenditures .
6 . The requirement for a n wspaper ad�•ertisement will be
costiv and should be el mi ated since the Notices of
Proposed Takes contains t e public hearing information.
7 . If an early lev,y certif c tion date is retained and other
cumbersome requirements a kept, then small cities should
remain exempt from the ro ess.
8 . The state should reimbu se local governments for the costs
of implementing Truth-i -T xation. If not reimbursed,
these costs should be a lo •ed as a special levv eutside of
levY limits.
9 . Once a workable Truth-i -T xatien process is in place ,
levv limits should be a ol ' she�.
� . ����7
WHEREAS , the current Truth- n- axation law, M. S . 2i� . 065 ,
places unreasonable burdens on the Citv of Saint Paul ; and
WHEREAS, there is growing c ns nsus among state and local
units of government that th T uth-in-Taxation law needs to be
changed;
NOW, THEREFORE BE IT RESOLV D, that the Cit� of Saint Paul
supports the proposed chang s ' n the Truth-in-Ta�ation la�+.
- . . �'�q- 5�'�
Members:
� James Scheibel, Chair
�"' ` ° CI7`Y OF � INZ` �AUL Committee-of-the-whole
. �.,;�;�:..f'
'I.:s>�;_;�;�U :
— OFFICE+`� OF 7` F. CITY COUNCTL
Date: arch 27, 1989
JAMES SCHEIBEL
Council President RECEIVED
Co m ttee Report
- �IAR 2 a 19a9
CITY CLERK
To: St. Paul City Councii
From: Ci�y Council Legisla io Committee `(�
1. Approval of Minutes - March 13 1 89
MINUTES WERE APPROVED
2. Substantial Rehabilitation
CCMMITTEE RECOMMENDED APPROVAL
3. Legislative Update
NO COMMITTEE ACTION REQUIRED
4. (additional item not on typed ge da previously distributed)
Trei�fn-'�-a�o�etio�
COM1�iI�.'TB�:- '� A�PI�C1Y
CITY NALL SEVENTH FLOOR SAINT PAUL, MINNESOTA 55102 612/298-5679
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