Farmers, school districts waiting for special session to approve tax credit

Dodge County farmers and school districts are waiting for a special legislative session that could finally see legislation granting a tax credit for school facility bonded debt become law.
The measure, which would give farmers a 40 percent tax credit on the school bond portion of their tax bill, passed both houses during the 2016 Legislative Session but the bill did not become law as Gov. Mark Dayton’s pocket veto scuttled the entire tax package.
The credit would first be realized in 2017. There are 266 school districts in Minnesota and in 88 of those districts savings are projected to be $350 or more per $1 million in homestead agricultural land, according to the Minnesota Rural Education Association.
The measure had broad bipartisan support in the legislature as both parties attempted to correct inequities in how taxes are determined for school bonding issues.
Currently homeowners in cities and towns are taxed only for their home and the land it is on. Farmers, however, are taxed on all their land not just the homestead. Under the new legislation rural residents would be taxed on their home and one acre of land.
Dayton did not sign the tax bill because, he said, there was an error, not related to the school tax credit, which would cost the state $101 million over the next three years.
Only the governor can call a special session and so far Dayton and the Republican leadership in the house have not been able to agree on the parameters for a special session.
The ag tax credit will affect all school districts in Dodge County although in different degrees depending on the levy amounts in the district. Those in the Kasson-Mantorville district, which has a larger levy because of current construction will see a greater benefit that those in the Triton and Hayfield Districts.
“Triton doesn’t have a lot of debt on bonds,” said Supt. Brett Joyce. The last bond referendum in Triton was passed in 2007, he said.
He added that the situation is different regarding the operating levy referendum the district will be putting before the voters in November. For operating levies, he said, rural residents are taxed only on their home and one acre of land.
Kasson Finance Director Bob Hasz said the exact amount of relief for district farmers will not be known until later this year when property is assessed.
Both Joyce and Hasz said that the legislation had the support of school districts as it mitigates the unfairness of current law and the schools do not lose any money. Kasson-Mantorville Supt. Mark Matuska said that as a school superintendent he was disappointed the measure was not signed into law.
The state picks up the amount of the tax credits, Joyce said. The landowner wins, he said, the schools do not lose any funds and the state can use a portion of the budget surplus to make up the difference.
The future of the legislation remained in doubt late last week, however, as the Legisl