ST. PAUL -- Counties would get new taxing authority, local levy limits disappear and some charitable organizations would be relieved of paying property taxes under a Democratic tax plan unveiled Monday.
To make up for anticipated state aid reductions, the proposal allows counties to impose a 0.5 percent sales tax increase instead of raising property taxes.
Voters could attempt to remove a county's sales tax increase under certain conditions. Also, the plan removes property tax levy limits put into law in 2008 next year for cities and in 2011 for counties.
House Property Tax Chairman Paul Marquart, DFL-Dilworth, said the proposal would result in "very few" property tax increases and increases accountability to property taxpayers.
The proposal is part of House Democratic-Farmer-Laborites' plan to erase a $4.6 billion state budget deficit in a new two-year budget plan.
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"It's how can we balance the budget while still trying to protect property owners, jobs and essential (government) services," Marquart said.
The plan is problematic in part because a sales tax increase in counties along Minnesota's border would leave businesses in those counties less competitive with neighboring states, said Rep. Pat Garofalo, R-Farmington, a property tax committee member.
Setting a limit on property tax increases is a better way to control property taxes, Garofalo said.
Levy limits are not effective, Marquart said, because local governments often set their levy at the cap, rather than at a smaller rate increase.
The committee will take public testimony on the bill today; the committee will vote on the bill Wednesday.
Wente and Davis work for Forum Communications, which owns The Daily Globe.
