Wednesday, February 04, 2009

Type III Bill Clears First Hurdle in House. HF 116, authored by Representative John Ward (D-Brainerd), passed the House Transportation and Transit Policy and Oversight Division on Wednesday on a voice vote. Similar to the discussion in the Senate for its companion bill, questions and comments on HF 116 centered on the problems created by the Department of Public Safety's interpretation of the Type III restrictions passed last session and how these revisions will remedy those problems.

As the bill stands now, all teachers, coaches, and other school district personnel will be exempt from a pre-service drug test and a physical. Some concerns have been expressed that this erodes some of the progress made in terms of assuring student transportation safety. The crux of the matter is, however, that HF 116 is a sensible compromise that keeps students in vehicles driven by adults--as opposed to students driving their own cars to events--who have some level of training. Here's hoping the bill's progress continues and that it can be passed in time for the spring sports' seasons.

House Property and Local Sales Tax Division Meets, Discusses Governor's Property Tax Plans. I testified today in the House Property and Local Sales Tax Division meeting, voicing concern over the Governor's decision to cut local government aid and several other property tax reduction mechanisms.

I was the only school-related testifier and in the room amongst those who follow the committee far more closely than the education groups, I could tell there was a bit of surprise that I bothered to testify. But, as every SEE member knows, what happens in one section of the property tax system invariably has an effect on other parts of the system. In other words, in property tax sensitive school districts (like SEE members), rising property taxes for cities or counties often have an adverse effect on the property tax situation for schools.

Local government aid (and other property tax reduction efforts) serves two basic purposes: (1) reducing property tax reliance within a taxing jurisdiction, and (2) equalizing property tax burdens between taxing jurisdictions. Both of these elements are important to SEE member districts, especially the second, as SEE members are relatively property poor and are at a property tax disadvantage compared to school districts with higher levels of property tax wealth.

That is the message I conveyed to the House Division this afternoon. I can understand the plight of the Governor as he tries to balance the state budget. It is important, however, that the Governor and his administration realize that pushing a greater portion of funding onto the property tax will have an uneven effect, as property taxpayers throughout the state will be faced with different increases as a result of those actions. More often than not, the uneven nature of the remedy adversely affects low property wealth districts, as taxpayers in those districts have to absorb a greater level of property tax effort because of lower values within the taxing jurisdiction.

I have no doubt that property taxes will increase in the year ahead. A number of school districts need to renew levies and will probably attempt to incorporate increases into those levies. It will be diificult to rectify the changes that will need to be made in the human services area without some property tax increases. And cuts in local government aid for the current year will get levied back for taxes payable in 2010 on a one-time basis. That clearly indicates that a property tax increase is in the offing.

I will keep you posted on how the property tax issue unfolds as the session moves forward. Feel free to contact me with any questions you have in regard to the Governor's property tax policy.

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