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John Nephew

Maplewood City Council Policy & Politics



Apparently interesting things happen on the weekends in legislative tax committees.

Today the House Tax Committee was finishing their omnibus bill, and the last amendment made was to repeal the metropolitan fiscal disparities program. The amendment was proposed by DFL Rep. Ann Lenczewski of Bloomington, and adopted on a 12-10 vote.

Fiscal disparities is a program that redistributes property taxes generated by commercial properties.  Cities pay in based on their commercial tax base, and then get paid back according to another formula. Maplewood has a strong commercial tax base (around the Maplewood Mall, for a conspicuous example) so we pay a lot in and get less back.

The Metro Council has a map that shows the top 20 contributors, including Maplewood.  Another map shows the top 20 recipients.

The fiscal disparities formula has been in need of some attention and reform for a long time.  I've griped about it myself, as I'm sure have the mayors and councilmembers of many similarly situated metro suburbs.  (Rep. Lenczewski is a former Bloomington councilmember, and they too are a big net contributor — #1 last year, in fact.)  However, just dropping it all at once is a pretty shocking change.

It might actually be a windfall for Maplewood.  Pair it with the proposed elimination of the Market Value Homestead Credit program (to be replaced with a class rate reduction for qualifying homes), and it seems theoretically possible that the 2012 levy certified by the city would actually represent the taxes that would be received by Maplewood to pay for our city government.

For cities that are big net recipients of fiscal disparities, it could be a harsh blow to their finances.  Further complicating things, the disparities figures affect calculation of local government aid, for the cities that still receive it.  So the change would ripple out to affect outstate communities, presumably by shifting some of their LGA to metro suburbs.

Lenczewski is a savvy politician and probably one of the most knowledgeable legislators in the state on tax issues.  Given her Bloomington council background, I'll bet she does want to see fiscal disparities reform.  But it's also possible that she's playing Eris and, in this radical form, the repeal is her golden apple, rolling into the middle of the House floor.  Yesterday I linked to an article about the politics in the tax bill.  This new amendment has the potential to pit one suburb against another, as well as to pull in the outstate cities with even bigger dollar reductions in LGA than looked to be the case a day ago, and thereby turn the local interests of some House Republican caucus members against each other.

Of course, we don't know what a final bill that passes either chamber will look like, nor whether it will be greeted by a veto pen at the governor's desk.  And it's way to soon to seriously think Maplewood is going to see a windfall from this, and if we did I wouldn't trust that it wouldn't be taken away by another bill the next year.  But in the completely rearranged political landscape we have in the state this year, who knows what might happen?


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