2014 Iron Range Fiscal Disparities Study


Forward

Our group has been inundated with questions pertaining to why “Fiscal Disparities” is having such an impact on Itasca County. We have tried to not only understand this legislation but to also inform and educate the public by raising questions as to the actual methodology used when applying the tax. The important question which needs to be addressed deals with the law of “unintended consequence” and did the legislators fully understand the long term effects of the law.

Some of the questions for discussion not covered in the legislative report but certainly important are as follows:

  1. What is the impact when applied to a Tax Increment Finance District, (is this property value still included in the tax even though the tax value is not collected but rather applied to the debt)?
  2. Does the public realize this tax is applied to not only new commercial and industrial tax base but also utilities?
  3. What is the impact when a new commercial, industrial or utility structure is built by a private nonprofit company that is not subject to property tax?
  4. Why does St. Louis County hold the power to distribute the money when their largest city, Duluth, is not in the Range Fiscal Disparities District? Ultimately could the relief given to St Louis County by this legislation ultimately relieve some tax burden to other areas like Duluth, not included in the RFD district?
  5. The percentage of participation by Itasca County has increased disproportionately to other counties. Is the formula to the tax so regressive it is stifling Itasca County’s chances of any real economic growth to the point that mathematically it cannot survive?

We at Grand Rapids Voice did contact the Minnesota State Auditor Office and did ask these questions. The answer to question 1 was yes, it does calculate in when a TIF District is applied and can negatively affect the tax.

All other questions have yet to be answered and are pending.

The provisions of the law are described below in the following report along with the impact on all counties affected.

As Grand Rapids Voice, a local nonpartisan civics study group, it is not our intent to make any legal opinion regarding any of the issues discussed here but rather to encourage the people in the community to start the dialogue needed to improve the lives of those living in the regional area.

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