Gov’s Veto Keeps Strict Limits on Property Taxes

Tuesday, June 28, 2011 at 8:43 PM by

The Governor used his veto pen to prevent a slight loosening of the restrictions on levy limits for counties and municipalities.

In his executive budget, the Governor proposed extending the time frame for levy limits for counties and municipalities through 2012 (with the taxes payable in 2013). He also proposed holding municipal or county tax levies to a zero percent increase, or to take into account the value of new construction, whichever is greater. Local governments would be able to exceed the levy increase limit by going to referendum.

When the budget moved to Joint Finance, that committee made some modifications to the ability of local governments to raise revenue from the property tax. Joint Finance allowed for municipalities and counties to carry forward a small amount of their unused levy capacity, under specific circumstances. Joint Finance also made the levy limit permanent, and allowed local governments to increase their levies by at least 1.5% in 2013(14) and thereafter.

The Governor vetoed part – but not all – of the Joint Finance changes. He vetoed the 1.5% minimum allowable increase in future years. However, he did not veto Joint Finance’s change that made the levy limits permanent. As levy limits currently stand in the final version of the budget, counties and municipalities will be generally unable, in the coming years, to increase their levy except to take new construction into account. Communities that are growing won’t necessarily be affected, but those that aren’t growing will have to make cuts when inflation outpaces the increased value of new construction.

Here is the Governor’s explanation of his veto:

“I object to creating an automatic increase in the minimum valuation factor without knowledge of conditions in future years for taxpayers, counties and municipalities. The ongoing minimum valuation factor would continue to be 0 percent as a result of these vetoes.

“While these vetoes do not sunset the county and municipal levy limits for property tax years after 2012, it is my intention that the structure of county and municipal levy limits should be revisited in each budget in conjunction with state aid policies as well as current and projected economic conditions for taxpayers, counties and municipalities.”

Tamarine Cornelius

Categories: 2011-13 biennial budget, Blog, property tax, taxes | Comments Off on Gov’s Veto Keeps Strict Limits on Property Taxes

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