ITEM: 12.4 Administration - Clark Arneson, City Manager
Title
RESOLUTION REQUESTING NO CHANGE IN FISCAL DISPARITIES
Background
Growth in economic development is an important goal for all communities. With that in mind, the Metro Areas’ Fiscal Disparities tax sharing system is making progress towards its objective. However, there may be an effort to dismantle this important program. If the fiscal disparities program was eliminated, most homeowner and business property tax statements in the Anoka county area would see an average increase of 10% on the combined city/school/county taxes. This would result in more disparity in the Metro area.
Anoka County passed a resolution at their October 25th county board meeting requesting the Legislature to support the continuation of the current fiscal disparities law, and they are asking all cities and school districts in Anoka County to do the same in order to communicate a united message to Legislators for the upcoming Legislative session.
Body
WHEREAS, the State of Minnesota adopted Minnesota Statute Section 473F - a system designed to share tax resources in the metropolitan area known as fiscal disparities; and
WHEREAS, the idea of tax-base sharing is to narrow the gap between communities with a strong and growing commercial-industrial tax base and communities with small or stagnated commercial-industrial tax base. To lessen the difference between these “haves” and the “have-nots,” the law requires that 40 percent of new commercial-industrial tax base be put back into the metropolitan pool and apportioned back to communities according to their population and overall tax base; and
WHEREAS, tax base sharing makes sense because communities in the Twin Cities area are interdependent parts of a single economic entity. One city might provide a family with a place to live, another a place to work, another a place to attend school, another a place to shop, another a place to generate electricity to light their home, and another location to handle waste products; and
WHEREAS, the Minnesota fiscal disparities tax sharing system is working and is making progress towards its objective; and
WHEREAS, tax base sharing results in spreading the benefits of regional centers and facilities to communities that do not have them but whose taxpayers support them, either through sales or income taxes. Further, fiscal disparities helps promote orderly growth in the entire metropolitan area; and
WHEREAS, fiscal disparities is an integral part of the metropolitan area’s property tax system, and is a fundamental benefit to the entire metropolitan area because it recognizes that communities are an interdependent economic unit- as show by the recent formulation of the economic development organization called “Greater MSP”.
NOW THEREFORE, BE IT RESOLVED that the City Council of the City of Blaine respectfully requests the Governor and the Minnesota Legislature to support continuation of the current Fiscal Disparities Law.
PASSED by the City Council of the City of Blaine this 15th day of December, 2011.
Recommendation
By motion, approve the Resolution.