A brief review of the Association's legislative platforms over the last several biennia reveals MMA's longstanding interest in the area of tax policy.
MMA’s Legislative Policy Committee advanced seven initiatives for the Legislature’s consideration during the 2017-2018 session.The keystone of the Association’s platform was a bill seeking to incrementally restore funding for the Municipal Revenue Sharing Program to 5% of state sales and income tax revenue by FY 2020.The bill was not funded and died.
Three fixes to the property tax exemption law were also advanced.One of those bills explicitly prohibited exempt institutions from leasing, for remuneration, their property for purposes not related to their charitable or educational mission while retaining their tax exempt status.A second exemption bill authorized the adoption of ordinances to assess service charges on non-governmental/church tax exempt institutions to recoup the costs of providing public safety services to those entities.The third bill repealed the exemption provided to companies that lease personal property to hospitals, while simultaneously making the property eligible for enrollment in the state’s Business Equipment Tax Exemption (BETE) program.These bills were rejected by the Legislature.
An effort to advance a $10 million broadband infrastructure bond was also rejected.
A bill proposing amendments to the law governing the Essential Programs and Services funding model to address year-to-year volatilities in school subsidy distribution was not submitted by its sponsor using the normal protocols.Instead, many of the initiatives found in MMA’s proposal were integrated into a larger education funding reform measure, elements of which were enacted in the compromise FY 2018-19 biennial state budget.
MMA also advanced a bill shifting the cost and oversight of county jail operations to the state.The goal of the proposal was to ensure that future increases in county jail operations costs would be shifted onto the state’s broad based taxpayers, rather than onto already overburdened property taxpayers.The Legislature did increase, by a modest amount, state funding for county jail operations in its FY 2018 and FY 2019 budgets.
The highlight of the session came in the form of the adoption of legislation providing much needed clarity regarding municipal regulatory authority over the commercial operations of medical marijuana caregivers.
Ten legislative initiatives were advanced by MMA’s LPC over the 2015-2016 biennium. For the first time in the Association’s history, a $10 million bond proposal for the purpose of enhancing municipal efforts to expand high-speed broadband capacity was advanced by MMA, as well as a more traditional $100 million highway and bridge bond. In the area of transportation, MMA’s legislative agenda also included a proposal to restructure and modernize the state’s “gas tax” in order to more adequately capitalize the state’s Highway Fund, and a separate proposal to restore full funding for the Local Road Assistance Program (which the Legislature recently cut by 10%) was also advanced.
Two reverse-the-mandate bills were included in the package, one of which would give over to state government the task of administering the General Assistance program and the other of which would eliminate the building code mandate imposed six years ago on municipalities with populations over 4,000.
Two proposals rounded out the legislative agenda. One would allow municipalities to organize their fire departments in a way that would require financial contributions from all property owners, even tax exempt institutions. The other gave municipalities some level of intervention authority in order to prevent abandoned buildings from becoming completely dilapidated.
The abandoned property legislation was enacted, and two transportation bond proposals – one for $100 million and the other for $85 million – were approved by the Legislature over the course of this biennium and sent to the voters. The remaining proposals in the legislative agenda, however, were ultimately rejected.
Coming off the heels of a 2012 legislative session that resulted in an unprecedented $84.5 million “transfer” of municipal revenue sharing dollars to state coffers, MMA’s 70-member Legislative Policy Committee (LPC) developed a 2013-2014 agenda focused on “protecting the core”. As a result, the Association’s primary advocacy efforts were dedicated to: (1) stopping legislative raids on municipal revenue sharing; (2) reversing the trend by moving toward, rather than away from, the state’s obligation to fund 55% of the cost of K-12 education; (3) making sure that appropriate investments are made in the state’s transportation infrastructure; and (4) finding alternative sources of financial assistance and more cost effective ways for municipalities to comply with the wastewater, drinking water and stormwater mandates embedded within the federal Clean Water Act. In conjunction with its “protect the core” mission, the LPC advanced six specific pieces of legislation proposing to: (1) issue a $100 million transportation bond; (2) provide greater municipal representation in the state road turnback process; (3) provide state aid for repairing public infrastructure damages resulting from a localized natural disaster; (4) directly link the cash circuitbreaker benefit with the responsibility to pay property taxes; (5) require the state to pay at least 90% of the costs of the “quality assurance review” mandate the Legislature imposed on the Public Safety Answering Points (PSAPs) for medically-related E-9-1-1 calls; and (6) create a limited exemption to the “public records” definition for e-mail addresses in the municipality’s possession that are used exclusively for providing one-way notifications.
Despite the Association’s “protect the core” efforts, the FY 2014-2015 budget adopted by the Legislature in 2013 transferred to state coffers an additional $159 million in municipal revenue sharing resources over the biennium. A $100 million transportation bond and $10 million water quality protection bond were approved by the Legislature and sent to the voters. The public records legislation was enacted. As a result of the Legislature’s action to repeal the Circuitbreaker program and replace it with a “property tax fairness credit” embedded into the state’s income tax code, the legislation seeking to link circuitbreaker cash benefits with the responsibility to pay property taxes was no longer necessary. The state road turnback bill was killed at the Committee level, as were the localized natural disaster and medically related E-9-1-1 quality assurance review bills.
In recognition of the difficult economic times, MMA's legislative agenda for the 2011-2012 biennium focused on fixing problems, some large and some small, rather than promoting comprehensive reforms or fundamental structural change. A majority of the 16 bills developed by the Legislative Policy Committee and presented to the Legislature in early 2011 dealt with generally small but troubling state mandates that make it unnecessarily more difficult or expensive for local government to do its job. Included in the package of "anti-mandate" bills were measures to address an inequitable state boiler inspection system, the fledgling uniform state building code program, the expensive newspaper notice mandate, and municipal snow dump licensing requirements. There was also a bill to improve the level of municipal control over the local street lighting program. While progress was made on many of these fronts, the bigger bills advanced by MMA in 2011, such as the bills to better protect the municipal revenue sharing program and address the state's policy on property (and excise) tax exemptions, were killed off at the Committee level.
MMA continued to support comprehensive tax reform in 2009 by urging the newly-elected 124th Legislature to take a second look at the 2007 comprehensive tax reform package that failed final enactment. In addition, MMA caused seven substantive bills to be submitted, which included:
- Exempt property. A bill establishing a system whereby a municipality, through the adoption of an ordinance, could require certain tax exempt institutions to pay a service fee for vital municipal services such as public safety and snow removal.
- Revenue Sharing. A bill designed to prevent the Legislature from continuing to raid the municipal revenue sharing program through its abuse of the Local Government Efficiency Fund.
- The integrity of education subsidy. A bill to prevent the Legislature from using the school subsidy appropriation to fund state personnel costs and other state programs.
- School consolidation. A bill to convert the financial penalty for failing to meet the school consolidation standards into an incentive system to reward school consolidation efforts.
- Building Codes. Two codes-related bills were submitted. One bill was designed to clean-up legislation enacted in 2008 creating a uniform statewide building code. The second provided an opportunity for qualifying municipalities to be delegated the authority to conduct the life safety review of commercial building plans, rather than the State Fire Marshal's Office, in order to allow for a one-stop-shopping development review process at the local level.
Credit Cards at City Hall. A bill allowing municipal governments to pass through to the consumer the credit card "merchant fees" that credit card companies charge to municipalities that accept credit cards.
No progress was made with respect to the exempt property issue, but every other MMA bill was satisfactorily addressed in one way or another before the Legislature finally adjourned in 2010.
During this biennium, MMA advanced proposed changes in law that would: (1) bring more accountability and stability to the Tree Growth "current use" tax program; (2) establish more predictability and stability in the revenue sharing distribution system; (3) enhance the ability of municipalities to charge tax exempt institutions certain service fees to help pay for the municipal services the exempt corporations receive; and (4) further develop the governmental spending and accountability issues that appear to have been the driving force behind various tax and spending limitation initiatives advanced in recent years through the citizen initiative process. None of the proposals was adopted by the Legislature as written, but identifiable progress was made on all four fronts.
In addition to the Association's legislative agenda, MMA's advocacy staff worked closely this session with the Legislature and with stakeholders on the bill to create a unified state-county corrections system and freeze the property tax contribution for county jails, as well as the bills to correct the many problems associated with the 2007 school consolidation law.
MMA's LPC adopted an eight-plank legislative platform for the 122nd Legislature, including proposals to give municipalities more authority over street light ownership and operations, restrict the state from scheduling statewide bond referenda outside of the normal primary and general election schedules, and ensure that motor vehicle fine revenue earmarked for local government actually gets distributed to the towns, cities and counties that are entitled to receive that financial support. In addition to MMA's legislative platform, the Association closely monitored the Legislature's enactment of its "property tax reform" legislation (LD 1) in 2005. LD 1 was the Legislature's replacement version of the initiative adopted by the voters on June 8, 2004.
"Question 1A" represented MMA's entire legislative platform during the 121st Legislature. The failure of the Legislature to tackle the related issues of tax reform and property tax relief prompted MMA to proceed with the citizen-initiative approach in 2002. The "School Finance and Tax Reform Act of 2003" – what came to be known as "Question 1A" – was developed within MMA in 2002 by a group of 12 municipal leaders from across the state. The initiative was presented to the Legislature after it received a record 100,000 signatures of support in November 2002. For the next 18 months it was fiercely opposed by the political, media and business establishment before finally being adopted by the voters on June 8, 2004.
A seven-plank program was advanced during the 120th Legislature, including a proposal to increase municipal revenue sharing, address once again the "charitable" exemption law, close a loophole regarding the tax exemption for "pollution control" equipment, and improve the reimbursement formula governing the "current use" tax programs. Only the revenue sharing increase was enacted, but the actual implementation of that increase was repeatedly delayed by the Legislature subsequent to its enactment, and the increase was ultimately repealed in 2009.
MMA advocated for a five-plank platform during the 1999-2000 legislative biennium that included an improved Local Road Assistance program, a more accountable school budget development process at the school district level, and the establishment of standards of eligibility for the "charitable" property tax exemption. Success was achieved on four of the five planks. All attempts to put more accountability in the charitable exemption law were killed in committee.
During the 118th Legislature, MMA pushed for comprehensive tax reform that included the creation of a $20,000 "Homestead" property tax exemption to help balance the state tax code's over-reliance on property tax revenue. That bill was quickly killed in committee. In 1998, however, a $7,000 Homestead property tax exemption was enacted.