Apparent tax bill snafu raises eyebrows but won’t affect Marshall, levy

MARSHALL – An 11th-hour amendment to the Legislature’s $2 billion tax increase bill signed in May reportedly contained an apparent error that has some city officials in Minnesota scrambling, a news release from said.

A provision of the amendment contained an error that wasn’t caught by lawmakers and dozens of lobbyists representing cities and counties. The apparent mistake allowed millions of dollars in debt to be added to the total amount available to levy, which is used by many local governments to calculate the 3 percent maximum property tax increase for 2014 operating budgets, the release said.

The allowable amount available for cities and counties to levy to calculate property taxes appeared to be much higher than, in many cases, what was anticipated – the exact opposite of what the Legislature apparently intended, the release said.

Gary Carlson, a lobbyist for the League of Minnesota Cities, said he doesn’t know where the error came from, but that it came up “very late in the process and up to that point there was really no discussion of it. Whenever you throw out language like that quickly toward the end of the session, people try to read it and figure out what it means, but there’s not always the luxury of time to figure it all out.”

Carlson accepted some of the blame for the error.

Marshall Mayor Bob Byrnes said if any cities would be affected by the snafu, it would larger, suburban cities.

“In order to take advantage of this apparent error would mean a city would have to issue debt in a fairly short period of time,” Byrnes said. “It would allow cities to increase their levy if they take on additional debt. If there were a voter-approved referendum for a new swimming pool or a new public facility, that would be excluded; we didn’t have that.”

Byrnes said the vast majority of debt the city of Marshall is dealing with is for street improvements that are paid for by assessments to the benefiting properties.

He called the error a non-issue for Marshall and said it will not affect the city’s levy-setting procedure next month.

“For a community like Marshall, the impact of the levy limits, coupled with an increase in Local Government Aid would mean our total tax levy would remain the same,” said Byrnes. “Other sources of revenue would increase, so the impact on taxpayers in 2014 would be less. That’s what we anticipated all along.