Capitol Update from Tom Saxhaug

Senate Tax Bill cuts Payment in Lieu of Taxes

As part of the Republican solution to the $5 billion deficit, HF 42 – the Omnibus Tax Bill, has a provision that cuts Payment in Lieu of Taxes (PILT).  The purpose of PILT is to pay counties for Natural Resource land that is not on the tax base to help them provide mandated services and programs.  The concept has been around as far back as the 1940's and became law in the 1970's.  PILT payments are made to counties to provide property tax relief to residents who are paying a disproportionate share of the tax burden due to the presence of tax exempt public lands.  They also encourage retention of public land base and foster sustainable natural resource management for long term benefits for future generations.
Counties that have large amounts of public land rely on these payments to offset property taxes that aren't collected.  That money is critical to local budgets and this proposal will require rural counties to make additional cuts or increase the local property taxes to backfill the lost revenue.  The stability that PILT provides to counties with public land is crucial to the continued viability of local services, Minnesota's timber industry and recreation opportunities for everyone in the state.  

Higher Education Budget cuts U of MN and MNSCU

The Republican controlled Senate passed a budget for higher education that cuts the University of Minnesota 19% and MNSCU 13%.  This legislation cuts funding for the U of M by more than three times and the Minnesota's State Universities, Community Colleges and Technical Schools twice as much as the Governor's recommendations.  The last time our state funded Higher Education at this level was 1998 and we now have 50,000 more students per year.  These cuts mean a reduction of over $430,000 to Rainy River Community College and $890,000 to Itasca Community College (ICC).

Every dollar invested in the U of M by the state generates $13.20 in the statewide economy and more than $512.3 million in state and local tax revenue every year.  The MnSCU system produces about 34,700 graduates, each year and also serves 157,000 students in non-credit courses. A recent issue of Washington Monthly ranked Minnesota as one of the top Community College States in the U.S. and ICC was ranked 5th overall.  These cuts will have consequences beyond higher tuition and fees.  We will likely see faculty and staff layoffs, enrollment caps, reductions in the size and scope of course offerings and fewer student services. If we are going to be serious about creating jobs and attracting new businesses, we need to offer highly trained and skilled workers.  This proposal does nothing to help us work our way out of the Great Recession.

Senator Saxhaug had the opportunity to meet with Amy Hildebrandt, David Furuseth and the 4th and 5th grade students from Northome in the Governor's reception room as they toured the State Capitol

Next Issue:

The final stretch to the

Budget Solution