Posted: 12/15/04
Final Draft - by Cliff Buchan
This year, tax hearings have some meat
When it comes to property taxes this December, ëtis the season.
Based on comments coming from area communities, it is easy to conclude that:
ïProperty taxpayers in city of Wyoming are not happy.
ïLinwood property taxpayers are complaining.
ïAnd it is much the same in the city of Forest Lake where local property taxes are heading upward.
This shouldnít come as a surprise. But it does in some ways.
In past years, the local Truth in Taxation hearings required by the state have been ho-hum events. Rarely are the hearings attended by citizens in any kind of number.
That has changed this fall and for a logical reason. Property taxes are going up. And there are reasons.
Perhaps our taxpayers are just confused. Almost everyday the daily newspapers are full of stories covering the state budget cycle and the Republican-led administration that has built its foundation on a ìno new taxî pledge.
The state has done wonders in erasing a massive budget deficit. But the legislature still faces a deficit, a deficit that will require some tough decisions in the session of 2005.
The wonders that have been accomplished at the state level may not be what they seem, however. While some budget cuts were accomplished, a good chunk of the deficit was erased through shifts, cuts in state aid and financial gimmicks that looked good on paper.
Remember the stateís tobacco endowment won in court? It is gone, sacrificed to help erase the past deficit.
Add in a spate of increased fees and the state looks even better while, of course, not raising taxes.
But the day of getting by on the cheap is slipping away from the legislature.
And it is the same for local governments that made sound cuts year ago for e 2004 budget.
The stateís last holdout for new money is gambling and Gov. Pawlenty is seeking an estimated $350 million from tribal casinos operating in Minnesota.
If the tribes donít pony up the money, the state may just enter the gambling business.
The state leadership, of course, doesnít want to be in the gambling business (the last anyone looked the state was quite heavily in the gambling business, however). The state is simply interested in the revenue.
The $350 million, of course, is not considered a tax.
Donít expect the tribes to buckle anytime soon on this ìdealî from the Pawlenty camp.
Now it is the local governments that must bite the bullet.
After a year (2004) of managing to get by without local government aid and enduring other cuts in funding, most local governments are doing what elected officials believe is the responsible thing to do: They are proposing raising property taxes.
To date, public complaints have come from the three communities mentioned here.
Is spending out of control or is the revenue simply not there?
One can always find fault or do some second guessing in the budget process. For example:
ïWas this the year for extra police protection in the community and school to be tacked on to the Linwood property tax levy?
ïShould firefighters in Wyoming be given a hefty hourly pay hike in 2005 at a time when the city property tax levy was seeing a big hit?
ïHow needed is a fire marshalís full-time position in Forest Lake during a time when the local budget is feeling pressure?
These are just three spending items that some might second-guess. The case can probably be made that all three items are expenditures that are not essential in every definition of the word. Certainly the extra police protection and pay to retain firefighters is important. So are fire inspections.
State legislators donít deserve a pass on this one. The state is still trying to recover from its decision to absorb all the basic funding of public education that once fell in part to local property taxes.
With the majority sticking firm to its ìno new taxî pledge, the state has slowly been painting itself into a corner.
But like all slick politicians, the tough decisions are being pushed off to local city councils, town boards and county boards by our state legislators.
The result is a growing tax rate for each area.
School districts like Forest Lake have escaped the damage. With a growing valuation base and no new local operating levies going on the books, school property taxes are generally going down.
That, too, is somewhat of a deceptive claim. While it is true school property taxes are going down the actual decline for many property owners is negated by the steady rise in property valuation.
In Forest Lake the average increase in valuation ó the amount upon which property taxes are based ó has gone up 15 percent for 2005.
No new taxes, you say?
While the state is acting with smoke and mirrors to solve its budget woes, the problem is simply being bumped to the local level.
And thatís where the complaints are being heard.
There is no envy here for local officials who must deal with service needs versus income streams and how much to tax local citizens.
How much is enough and what service is essential?
And frankly, the state gerrymandered tax picture does not bode well for the Forest Lake scene in the year ahead.
Consider that the city levy is likely to take a sizeable jump for 2005.
Also consider the possibility of a substantial bond issue in 2005 for a community center and the possibility of more general fund expenditures to subsidize the community center, should it pass the voter test. How will our taxpayersí react to more taxes for a community center?
Next look at the school district where an excess operating levy will likely go before voters next November.
Throughout ISD 831 (yes, Forest Lake, Linwood and Wyoming are a part) property taxes for the schools will go up if the issue is approved.
The odds may stack up negatively for any local bonding request being approved by voters.
That state mandate of ìno new taxesî may certainly ring home true in the Forest Lake.
And will the better good be served?
Forest Lake Times
P.O. Box 218
880 SW 15 St.
Forest Lake, MN 55025
651-464-4601
Fax 651-464-4605