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Special Taxing Districts

Special Taxing Districts. A Presentation to the Property and Local Tax Division November 10, 2011 House Research Department Deborah Dyson Steve Hinze Joel Michael. Special Taxing Districts What Are They?.

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Special Taxing Districts

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  1. Special Taxing Districts A Presentation to the Property and Local Tax Division November 10, 2011 House Research Department Deborah Dyson Steve Hinze Joel Michael

  2. Special Taxing DistrictsWhat Are They? • Special districts: Special or limited purpose units of local government (as contrasted with general jurisdiction units, such as cities and counties) • Special taxing districts: Special districts with taxing powers; many special districts do not have the power to tax • Our definition: Special taxing districts with property tax powers but not school districts House Research Department

  3. Reasons to EstablishSpecial Taxing Districts State and/or local governments may have a variety of purposes for authorizing or creating special taxing districts: • Geographic service area is larger or smaller than the area of the city or county, e.g.: • Watershed districts • EMS districts • Sanitary districts House Research Department

  4. Reasons to Establish (cont’d) • Specialization: • Focus attention on narrow task or problem, which may be low priority for city or county • Attract members for governing body or staff with specialized expertise (e.g., in managing an airport or hospital) • Joint powers arrangements between several units is too cumbersome– it’s more efficient to set up a separate unit of government House Research Department

  5. Reasons to Establish (cont’d) • Financing flexibility – • Allow for alternative distributions of the governmental costs for certain services • Avoid limits such as levy limits or debt limits (e.g., election requirements) on financing for perceived needs • Keep debt off city’s or county’s balance sheet • Satisfy federal law (e.g., it required HRAs to be set up to get urban renewal grants in 1950’s and 1960’s) • Insulate decision-making from “politics” House Research Department

  6. Special Taxing DistrictsPay 2011 Levies House Research Department

  7. Special Taxing District Levies (in millions) House Research Department

  8. Special Taxing District Levies Excluding Metro Agencies and Hennepin Co. miscellaneous (in millions) House Research Department

  9. Special Taxing District Levies as a Percentage of All Property Tax Levies House Research Department

  10. Housing and Economic Development:Types of Districts General law authorizes cities and counties to form three types of special districts for economic development and housing purposes: • Housing and Redevelopment Authorities or HRAs • Economic Development Authorities or EDAs • Port Authorities Some communities have special laws that modify these general powers slightly House Research Department

  11. Housing and Economic Development:Purposes and Functions of Districts • Housing • Development, financing, and operation of affordable housing (privately owned) • Financing and operation of public housing • Redevelopment – redevelop blighted areas House Research Department

  12. Housing and Economic Development:HRAs: Establishment & Governance • May be created by: • Cities • Non-metro counties and designated metro counties • Groups of counties and cities (e.g., multi-county HRAs) • Governing body is appointed by city or county (city council and county board members often serve) House Research Department

  13. Housing and Economic Development:HRAs - Levies and Bonding Powers • Pay 2011 levy = $44.8 million • Levy limit is 0.0185% of taxable market value • Number of HRAs levying taxes = 81 for pay 2011 • May issue GO bonds (backed by limited HRA tax only) and revenue bonds for projects House Research Department

  14. Housing and Economic Development:Economic Development Authorities • Purpose is to encourage redevelopment and economic development • Established by either cities or counties • Governing body is selected by the city or county (city council or county board members often serve) House Research Department

  15. Housing and Economic Development:EDAs – Levies and Bonding Powers • Pay 2011 levy = $5.2 million • Levy limit is 0.01813% of taxable market value (slightly lower than the HRA limit) • Number of EDAs levying in 2011 = 26 • May issue GO bonds (with election) and revenue bonds House Research Department

  16. Housing and Economic Development:Port Authorities • General purpose is to encourage redevelopment and economic development • May be established by cities that are authorized by special laws to do so (i.e., to exercise the general law powers) – 26 cities have these laws • St. Paul Port Authority and Seaway Port Authority (Duluth) directly established by law House Research Department

  17. Housing and Economic Development:Port Authority Levies and Bonding Powers • Pay 2011 property tax levy = $4.1 million • Levy limit = 0.01813% of taxable market value (identical to the EDA limit) • Number levying in 2011 = 4 • May issue GO bonds (without election) and revenue bonds House Research Department

  18. Economic Development Agency Levies (in millions) House Research Department

  19. Health & Safety Purpose:Types of Districts General law authorizes: • Hospital districts • Emergency service (EMS) districts Special laws authorize ambulance districts, fire protection districts, hospital districts, and one medical clinic district House Research Department

  20. Health & Safety:Hospital Districts • Used to acquire, construct, and operate hospitals and nursing homes • Two or more cities may create; several are authorized by special laws • Pay 2011 levy = $6.9 million • Number levying = 14 for pay 2011 (as many as 16 in 1990s) House Research Department

  21. Health & Safety:EMS Districts • Purpose is provide method of financing EMS services over service area • Two or more cities or counties may establish • Levy limit is lesser of $400,000 or 0.048% of taxable market value • Pay 2011 property tax levy = $267,000 • Number levying = 3 House Research Department

  22. Health & Safety:Special Law Districts • Cloquet Area Fire Protection and Ambulance Special Taxing District (2009) – $1.76 million levy for pay 2011 • Moose Lake Fire Protection District (1987) - $136,000 • Floodwood Ambulance District (1993) – $25,000 • East Lake Medical Clinic District (1989) – $30,000 House Research Department

  23. Health & Safety District Levies(in millions) House Research Department

  24. Transit and Transportation:Types of Districts Transit and transportation purpose special taxing districts include: • Regional rail authorities • Transit districts (outside of 7-county metro area) • Airport authorities House Research Department

  25. Transit and Transportation:Regional Rail Authorities • Preservation and improvement of local rail service for ag, industry, or passengers • Members of governing body are appointed by county • Pay 2011 levy = $48.7 million • Levy limit = 0.04835% of taxable market value • Number levying in 2011 = 11 (9 are for passengers and 2 for freight) • May issue “revenue” bonds, backed by limited property tax House Research Department

  26. Transit and Transportation:Transit Districts • Provide transit service in defined areas, limited to nonmetropolitan counties • Two districts established by law with members appointed by the cities and counties • Pay 2011 levy = $2.4 million • Levy limit = 0.12089 (St. Cloud area); 0.07253 (Duluth) • Both districts have bonding authority House Research Department

  27. Transit and Transportation:Airport Authorities • Acquire, construct, and/or operate airports • Pay 2011 levy = $670,000 • Number levying = 2 (Thief River Falls and Bemidji) • No levy limit, but levy must be approved by 2/3rd vote • Authority to issue bonds, including GO bonds, with 60% vote House Research Department

  28. Transit & Transportation Levies(in millions) House Research Department

  29. Water and Sewer:Type of Districts • Watershed Districts • Water Management Organizations – metropolitan area • Sanitary sewer districts House Research Department

  30. Water and Sewer:Watershed Districts • Solve and prevent surface and groundwater water-related problems • Established by order of BWSR after petition of citizens or local governments and making findings • Pay 2011 levy = $39,702,000 • Number levying = 46 districts, includes metro WD • levy limits: different limits for different purposes • May issue bonds or have member counties issue bonds for district House Research Department

  31. Water and Sewer:Watershed Management Org. • Plan and implement metropolitan area surface water management act • Mandatory in metro area, can be a watershed district, joint powers, or county organization • Pay 2011 levy = $8,893,000 • Number levying = 11 of 18 JPA, county WMOs • levy limit is set in the ordinance of the WMO • If a watershed, may issue bonds House Research Department

  32. Watershed & Water ManagementDistrict Levies (in millions) House Research Department

  33. Water and Sewer:Sanitary Sewer Districts • Collection and treatment of wastewater • Created by order of MPCA after petition process, or by special law • 5 member boards selected by member units of government; board maybe larger to insure at least one member per member local government • Pay 2011 levy = $626,000 • Number levying =10 (of approx. 60) • No levy limits • May issue GO bonds, requires an election House Research Department

  34. Sanitary Sewer District Levies(in millions) House Research Department

  35. Metropolitan Agencies and RDCs • Metropolitan Council • Metropolitan Airports Commission • Metropolitan Mosquito Control Commission • Regional Development Commissions House Research Department

  36. Metropolitan Agencies and RDCs:Metropolitan Council • Plan orderly and economical development of metro area; own, operate regional wastewater system, Metro Transit • 17 members, 16 from districts, appointed by Governor • Pay 2011 levy: transit capital $42,179,000, other $33,246,000 • Levy limits for general nondebt, RALF, MLCA, • May issue debt for wastewater system (unlimited), transit capital (limited), parks & open space (limited) House Research Department

  37. Metropolitan Agencies and RDCs:Metropolitan Mosquito Control • Monitor and control mosquitoes, ticks and black flies in the district to protect the public from disease and annoyance • 18 members, all county commissioners appointed by respective counties in metro area • Pay 2011 levy = $16,758,000 • Levy limit-yes, based on prior year • Cannot issue bonds House Research Department

  38. Metropolitan Agencies and RDCs:Metropolitan Airports Commission • Owns and operates MSP and 6 reliever airports in the metropolitan area • Governor appoints 15 members: 8 from districts, 4 from greater Minnesota, a chair • Has not levied since 1969 • Levy limit – 0.00806 % of taxable MV for O&M • Can issue general airport revenue bonds, general obligation revenue bonds, certificates of indebtedness House Research Department

  39. Metropolitan Area Agency Levies(in millions) House Research Department

  40. Metropolitan Agencies and RDCs:Regional Development Comm. • Work with & on behalf of local governments to develop plans or implement programs to address economic, social, physical, and governmental concerns of each region • Established by petition of local governments, Governor’s order. Governed by local government representatives, selected per bylaws • Pay 2011 levy = $3,084,000 • Number levying = 9 (of 9) • levy limit – greater of fixed amount in statute or 103% of amount levied in prior year • Tax anticipation borrowing only debt allowed House Research Department

  41. Regional Development Commission Levies (in millions) House Research Department

  42. Hennepin County Misc. • Park District • Minneapolis Park museum • Minneapolis teachers retirement House Research Department

  43. Hennepin County Misc.Park Districts • To acquire, develop and maintain large parks, wildlife sanctuaries, forest and other reservations, and provide public access to historic sites, lakes, rivers, etc. • One or more counties meeting the population threshold can establish a park district • Three Rivers Park District is the only one, with 2 members appointed by the Hennepin County board and 5 elected from districts • Pay 2011 levy = $40,477,000 • Levy limit – 0.03224% • May issue bonds up to 0.5% of “full and true value” House Research Department

  44. Hennepin County Misc.Minneapolis Park Museum • To care for, maintain and improve a museum, land and collection - Minneapolis Institute of Arts • Minneapolis Park Board is an elected body • Levy is county-wide • Pay 2011 levy = $11,979,000 • Levy limit – 0.00846% • No bonding authority House Research Department

  45. Hennepin County Misc.Minneapolis Teachers Retirement • Mandated city contribution to the Teachers Retirement Association, but the law explicitly classifies this as a special district tax rather than a city tax • Pay 2011 levy = $2,253,000 • No Levy limit • No bonding authority House Research Department

  46. Hennepin Co. Miscellaneous DistrictLevies (in millions) House Research Department

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