Once upon a time, the state collected taxes and distributed them to counties and cities to help pay for the expense of state mandates, which are largely administered by counties. Then, Tim Pawlenty and Minnesota Republicans slashed local government aid, causing property taxes to soar as counties tried to replace the lost revenue.
Falling state aid has been a direct cause of rising property taxes, but that hasn’t stopped Tim Pawlenty from blaming local governments for rising property tax bills. In fact, his big “achievement” last year was to cap property tax increases, virtually ensuring that local governments would fall even further behind.
It should come as no surprise, then, that counties are not happy about a DFL-sponsored bill that would allow counties to raise local sales taxes to pay for state mandates.
Jim Mulder, the executive director of the Association of Minnesota Counties (AMC), tells PIM his organization is far from sold on the idea that letting counties levy up to one-half of 1 percent in sales taxes. “To be honest,” says Mulder, “we’re not very comfortable with it at this point. We’re not exactly sure what all the unintended consequences could be. We’re also concerned that it’s just a backdoor way to increase state taxes, but put us in the position to have to do it.
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Though the proposal ostensibly makes county sales taxes optional, he argues, the practical logic of the idea is that “to replace aid we’ve gotten before, they’re going to have us levy taxes in order to be able the same amount as we’ve previously gotten in aid.”
This is money that used to come from the state — that should come from the state — to pay for the cost of state mandates. As Mulder implies, if legislators want to increase taxes, they should have the courage to do it themselves, instead of forcing counties to do it for them. Especially because it will be only a few years before Republicans in the legislature complain about county taxes and move to decrease local government aid even further.
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