Local government aid on taxes chopping block


A $105 million plan to cut local government aid, county program aid and market value homestead credit most likely will be before the House Taxes Committee Tuesday night.

Chairs of the House and Senate tax committees were united during a press conference as they talked about the bite local units of government will have to take as their share of balancing out the nearly $1 billion state budget deficit.

With new revenue off the table, Sen. Tom Bakk (DFL-Cook) said the cuts parallel those of the governor’s unallotment and “will make life more difficult for our local units of government.” He said the cuts should not have any impact on the local taxpayer unless cities and counties decide to raise property taxes next year to levy back some of the lost aid.

Rep. Ann Lenczewski (DFL-Bloomington) said the governor proposes a cut of $250 million. “We are not willing to take that deep of a cut,” she said.

This bill, HF2077, is expected to garner committee approval and then move to the House Ways and Means Committee this week, where it would be rolled into the omnibus supplemental budget bill, HF1671. That bill could see action on the House floor yet this week.

The House Taxes Committee heard another Lenczewski tax bill, HF2695, on Monday. The “jobs” bill proposes several new tax incentives for investors who provide money for small businesses and historical building renovations, as well as some language to help with the Mall of America expansion. The bill was laid over as how the credits will be paid for has yet to be worked out.