Archived Story

Municipal street fees are really a tax hike

Published 8:36am Wednesday, April 24, 2013

Column: Guest Column, by Kaye Rakow and Todd Liljenquist

Last fall, many legislators won their elections with promises of lower property taxes at the top of their agenda. Yet, a proposal that would have a dramatic — and opposite — impact on property taxes is working through the committee process and headed for full passage.

Todd Liljenquist
Todd Liljenquist

Municipal street improvement fee authority is a concept first promoted by cities almost 15 years ago, and it has not improved with age. It has been rejected, on a bipartisan basis, each of the six times it has been introduced over the last decade. This concept would allow city government to impose a separate fee — in addition to current property taxes — on property owners to fund a special account for street improvements.

The street improvement fee/tax can be imposed without voter approval, without a cap, or any of the current protections afforded property owners in the special assessment law.

City government advocates say it’s too difficult to manage their budgets to provide for street maintenance.

Therefore, they are asking state legislators to give cities the power to impose street improvement taxes in such a broad way that it would give cities the power to impose a yet-to-be-determined fee on property owners for up to 20 years.

Property owners are already paying for streets through their property taxes, local government aid, special assessments, special service districts, tax-increment-financing districts and more.

Supporters of the idea are incredulous that the broad coalition of opponents to this legislation would not defer to the spending wishes of their city officials who want this new taxing authority. But opponents see this for what it is: an unchecked new tax on property that will create a new expense for homeowners and businesses.

Kaye Rakow
Kaye Rakow

It is disingenuous for state legislators to give city governments the ability to tax property in this manner and then try to tell constituents that they’re for property tax relief. The street improvement fee legislation is nothing more than an additional property tax and an end-run around traditional taxing methods.

This unchecked taxing authority will only hurt Minnesota’s property owners.

This column was submitted on behalf of the Coalition Against Municipal Street Improvement Fees by Kaye Rakow, director of public policy, NAIOP: Commercial Real Estate Development Association; and Todd Liljenquist, director of government relations, Minnesota Multi-Housing Association.

A version of this piece was printed in the Minneapolis Star Tribune on April 14.

Groups opposed to new street fees