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

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Presentation on theme: "Special Taxing Districts A Presentation to the Property and Local Tax Division November 10, 2011 House Research Department Deborah Dyson Steve Hinze Joel."— Presentation transcript:

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 Districts What 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 11/10/20112House Research Department

3 Reasons to Establish Special 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 11/10/20113House 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 11/10/20114House 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” 11/10/20115House Research Department

6 Special Taxing Districts Pay 2011 Levies Function or Purpose # Levying Amount (000) % of Total Housing and economic develop111$54, % Health and safety209,1022.9% Transit and transportation1451, % Water and sewer6749, % Metropolitan agencies and RDCs1295, % Hennepin miscellaneous354, % 11/10/20116House Research Department

7 Special Taxing District Levies (in millions) 11/10/20117House Research Department

8 Special Taxing District Levies Excluding Metro Agencies and Hennepin Co. miscellaneous (in millions) 11/10/20118House Research Department

9 Special Taxing District Levies as a Percentage of All Property Tax Levies 11/10/2011House Research Department9

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 11/10/201110House 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 11/10/201111House 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) 11/10/201112House Research Department

13 Housing and Economic Development: HRAs - Levies and Bonding Powers Pay 2011 levy = $44.8 million Levy limit is % 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 11/10/201113House 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) 11/10/201114House Research Department

15 Housing and Economic Development: EDAs – Levies and Bonding Powers Pay 2011 levy = $5.2 million Levy limit is % 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 11/10/201115House 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 11/10/201116House Research Department

17 Housing and Economic Development: Port Authority Levies and Bonding Powers Pay 2011 property tax levy = $4.1 million Levy limit = % of taxable market value (identical to the EDA limit) Number levying in 2011 = 4 May issue GO bonds (without election) and revenue bonds 11/10/201117House Research Department

18 Economic Development Agency Levies (in millions) 11/10/2011House Research Department18

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 11/10/201119House 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) 11/10/201120House 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 11/10/201121House 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 11/10/201122House Research Department

23 Health & Safety District Levies (in millions) 11/10/2011House Research Department23

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 11/10/201124House 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 = % 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 11/10/201125House 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 = (St. Cloud area); (Duluth) Both districts have bonding authority 11/10/201126House 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 2/3 rd vote Authority to issue bonds, including GO bonds, with 60% vote 11/10/201127House Research Department

28 Transit & Transportation Levies (in millions) 11/10/2011House Research Department28

29 Water and Sewer: Type of Districts Watershed Districts Water Management Organizations – metropolitan area Sanitary sewer districts 11/10/201129House 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 11/10/201130House 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 11/10/201131House Research Department

32 Watershed & Water Management District Levies (in millions) 11/10/2011House Research Department32

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 11/10/201133House Research Department

34 Sanitary Sewer District Levies (in millions) 11/10/2011House Research Department34

35 Metropolitan Agencies and RDCs Metropolitan Council Metropolitan Airports Commission Metropolitan Mosquito Control Commission Regional Development Commissions 11/10/201135House 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) 11/10/201136House 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 11/10/201137House 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 – % of taxable MV for O&M Can issue general airport revenue bonds, general obligation revenue bonds, certificates of indebtedness 11/10/201138House Research Department

39 Metropolitan Area Agency Levies (in millions) 11/10/2011House Research Department39

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 11/10/201140House Research Department

41 Regional Development Commission Levies (in millions) 11/10/2011House Research Department41

42 Hennepin County Misc. Park District Minneapolis Park museum Minneapolis teachers retirement 11/10/201142House 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 – % May issue bonds up to 0.5% of “full and true value” 11/10/201143House 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 – % No bonding authority 11/10/201144House 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 11/10/201145House Research Department

46 Hennepin Co. Miscellaneous District Levies (in millions) 11/10/2011House Research Department46


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