By Kitty Mayo
The Minnesota Senate passed a tax bill proposing $900 million in tax cuts just a few days before the Easter/Passover recess, along with an amendment that would give counties in northern Minnesota a much needed break.
Adding wording that would give money to counties that are dealing with forest land easements, in this instance specifically impacting the UPM Blandin Paper Company case, concern was raised by some legislators that no adequate mechanism was put in place to pay for those costs.
Counties affected by the lawsuit in which Blandin prevailed in Minnesota tax court include Itasca, St. Louis, Koochiching, and Aitkin.
Itasca County’s Auditor/Treasurer Jeff Walker was pleased that the amendment would provide funding for the shortfall that is anticipated in the current settlement agreement with Blandin.
For now, however, things are at a standstill until after the spring recess, with legislators back in session April 18. The tax bill, with its promising amendment will now move into conference committee with the goal of crafting a compromise that will be approved in the House of Representatives. Following that hurdle, it will have to be signed by the governor.
Walker says that provisions are being made for funds to come out of county program aid through Hennepin County, to the tune of about $6 million. Approximately $1 million going forward every year would continue to fund the payback.
“That equates to about $6 million for the back taxes, and about $900,000 a year going forward that would be reimbursed to the county,” Walker stated.
While Walker is feeling positive about the direction the Senate has taken, it is only the first step toward resolution of a very big problem for Itasca and neighboring counties.
Currently, Walker reports that the settlement agreement on the table with Blandin calls for a total payback of $11 million, with the state agreeing to paying 50 percent of that price tag. “But if the legislature does not come through, the settlement offer is off the table and we could owe Blandin $11 million,” he said.
Resulting from a conservation easement created by the state legislature in 2009, Blandin has contended that its properties were overvalued and thus overtaxed for a number of years. A ruling by the Minnesota Supreme Court in 2016 ordered the affected counties to reimburse Blandin and then to follow market value assessments of the properties in question going forward.
In a press release, Sen. Justin Eichorn (R-District 5) said that the bailout provision in the tax bill would help counties get out of debt. While Eichorn conceded that there is plenty of blame to go around for bringing on and managing the problem, in the end, small county governments and taxpayers would ultimately bear the burden of the past mistakes.
“The implications for the counties are devastating and threaten the financial stability of each of them. The consequences will not only be felt by the counties, but also by residents who could see vital programs cut and increases in their local property taxes,” Eichorn stated, who added that this legislation could prevent further fallout.