St. Paul, Woodbury court cases on municipal fees also impact NAIOP members

September 14, 2017 at 1:43 pm

Earlier this month, a Citizens League task force released a report suggesting that the City of St. Paul should explore a PILOT (Payment-In-Lieu-Of-Taxes) program for non-profits with substantial real estate holdings. A Minnesota Supreme Court decision struck down St. Paul’s expansive assessment system for infrastructure improvements, and Mayor Chris Coleman announced a projected property tax increase of nearly 24 percent to replace assessment fees. The Citizens League report recommended that St. Paul explore a voluntary PILOT system for non-profits such as health care facilities and higher education, which are exempt from property taxes but pay assessment fees. Kaye Rakow, former public policy director for NAIOP Minnesota, served as co-chair of the task force.

While NAIOP is concerned about the size of the St. Paul property tax proposal, we also strongly support more transparency in municipal taxing decisions and more limited use of municipal fees.

In a case involving the City of Woodbury, a district court judge ruled that an assessment fee on builders to pay for road improvements outside of a residential subdivision was illegal under state law. The Minnesota Court of Appeals will rule as soon as this month on the appeal of that decision, which is one of several decisions in the past two decades limiting the expenditures that cities can include in assessment fees on new development.

Either issue could be addressed at the State Capitol in the upcoming legislative session.

Entry filed under: Featured Articles, Public Policy | Government Affairs.

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