The Free Press, Mankato, MN

Local News

September 11, 2007

Tax relief, transportation left from session

By Mark Fischenich

Victims of the flooding in southeastern Minnesota will likely get relief out of today’s special session of the Legislature, but property owners in Mankato, North Mankato and other area cities will see their taxes rise and advocates of more road funding will have to wait.

“It’s too bad,” North Mankato City Administrator Wendell Sande said. “I would have hoped for more.”

Area lawmakers also expressed disappointment that the special session agenda will be limited to only flood relief under an agreement between Gov. Tim Pawlenty and legislative leaders. But Rep. Terry Morrow, DFL-St. Peter, said the inability of Pawlenty and Democratic leaders of the Legislature to find common ground on tax and transportation policy required that the agenda be narrowed to the most crucial topic.

“In the end, it would have been wrong to hold up much needed (flood) relief while we debated those issues,” Morrow said. “... It would be morally irresponsible to delay any more than the delay that has already occurred.”

Some lawmakers and interest groups have been talking since the end of the regular legislative session in May about the need for a special session to deal with tax legislation vetoed by Pawlenty after lawmakers had adjourned.

The tax bill had substantial increases in local government aid to cities and direct property tax relief for low and middle-income property owners. Although the LGA increase was for one year only, it would have reduced anticipated increases in municipal taxes in places such as North Mankato and Mankato.

Sande’s proposed 2008 budget, for instance, included two options for the overall property tax increase — 9.1 percent if LGA hikes were not approved in a special session and 6.5 percent if state aid increases were passed by the Legislature.

“Property tax relief will be forgone for next year,” Sande said. “Obviously, if they pick it up in February (when the Legislature next meets in regular session), it would be for ’09.”

Pawlenty, who said he vetoed the tax bill because of a provision related to calculating budget forecasts, said through much of the summer that he was reluctant to call a special session to fix the tax bill — even when lawmakers signaled a willingness to drop the budget forecast provision. But when the I-35W bridge in Minneapolis collapsed on Aug. 1 and the catastrophic floods hit later that month, the governor said he expected to call an extra legislative session and didn’t rule out property tax relief or a comprehensive transportation funding plan.

The governor and legislative leaders spent most of the last few weeks sending letters back and forth with little indication that they were nearing a settlement on tax and transportation funding packages.

Rep. Tony Cornish, R-Vernon Center, said he understands the concerns of city officials about declining or stagnant LGA levels. At the same time, Cornish said it may be good that the state will wait until the regular session to develop a comprehensive plan for reducing the backlog of needed road and bridge projects.

“Sometimes it’s better to maybe take some time rather than a quick plan that’s thrown together that we might regret later,” Cornish said.

But after watching the governor and lawmakers wrangle over transportation and tax policy for several years, Sande thought the bridge collapse and a resulting special session might finally prompt some consensus that went beyond disaster relief.

“It’s certainly a disappointment to us,” he said. “There were other important issues that need to be dealt with, among them transportation and tax relief.”

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