Wilderness Waterfront Incentive to Protect Our LakesPublished by forester on Wed, 08/08/2012 - 14:42
At an appearance at the Humphrey Public Policy School this spring, Commissioner of Revenue Myron Frans noted that with the legislative session over, he was looking forward to having some time to put together a major tax reform package in 2013. Republican and Democratic legislative leadership also have major tax reform for 2013 on the front burner. MSRPO has been advocating for a number of reform ideas during these discussions.
We have had to focus on educating policy makers that Minnesota's shore line owners deserve some property tax relief. One of the big obstacles traditionally has been that the taxes on shore line do not appear to be all that high to policy makers. The state compares taxes across property classes with an Effective Tax rate, ETR, the taxes paid divided by the assessed value. With property values skyrocketing during the real estate bubble, the ETR on lake shore properties remained relatively low, despite the fact that these properties had unprecedented property tax increases.MSRPO - MN Lakes and Rivers has been advocating for shore line owners in this process. While we do not know many details yet, we are at the table to be sure, advocating for fairness, simplicity, and an incentive for good shore line management. MN has the most complex tax system in the country with close to 50 separate tax classifications. The appeals process is not transparent, accessible or responsive. We are urging greater efficiencies in the management of local and county governments and making headway there.
The other thing that masks the high taxes on cabin properties in particular is that the seasonal recreational market value is split 14% in cities and 86% in townships. This makes seasonal recreational property look favored to policy makers on a state wide basis when the reverse is true.
Another area of focus this summer has been on Wilderness Waterfront Initiative. Minnesota has strong and effective incentives for farmland, wetland and forest conservation, but in the land of ten thousand lakes, there is no incentive for shore line owners that protect or restore the riparian area they steward for the benefit of all. In fact our current system demands ever greater development or redevelopment of shore line.
Minnesota’s tax code aggressively selects for ever greater fragmentation, development and redevelopment of shore line, and it applies this pressure relentlessly, year after year in good economies and bad. As one assessor in Saint Louis County said, “We used to mine iron ore, now we mine lake shore.” As every MSRPO member knows, the property taxes in the last ten years have become so high as to be almost confiscatory. People that do not want to sell or subdivide are being forced to do so simply because they cannot afford the taxes.
- The rejection of the Draft Shoreline Rules by Governor Pawlenty and difficulty in advancing these rules during the last two legislative sessions is evidence that regulation alone cannot protect our waters;
- Rules are not only expensive and difficult to pass, but they are expensive to enforce, putting additional strain on already tight local government budgets;
- Local boards of appeal regularly give variances believing, incorrectly, that by promoting questionable development they are strengthening their local economy;
- Even with the unprecedented influx of Legacy Amendment dollars being used to protect land through acquisition, Minnesota cannot buy all of the land needed to preserve our water quality and critical forest habitats;
Minnesota must stop mining its forests and shorelines for revenue. The Wilderness Waterfront Incentive will level the playing and promote healthy stewardship of a resource that adds $4 billion to Minnesota’s economy, our lakes and rivers.
The Wilderness Waterfront Incentive is:
- Revenue neutral to local and state governments;
- Large enough to encourage shore line consumers to be shore line conservationists;
- Fair to all property classes.
It is long past time to provide incentives for those that practice sound stewardship of Minnesota’s 90,000 miles of shoreline, more than California, Florida and Hawaii combined. We can lead the nation in conservation innovation.
As you meet candidates this summer and into the election year, make sure to question them about their tax reform ideas. Ask them if they would be willing to take a leadership role in promoting a fairer, more transparent and responsive property tax system. Encourage them to support an incentive program for good shore land stewards.