A Win for Buildings & Tenants: $21,000,000 State General Levy Reduction

July 12, 2021

NAIOP members and fellow industry leaders,

As Chair of our Public Policy Committee for NAIOP MN, I find it timely to report our team’s advocacy results with this year’s legislative session officially in the books. While the legislature met virtually or in a hybrid setting this year, we did not let that impede our industry’s lobbying efforts.

Our team scheduled more meetings this year than any other year, testified at hearings, and strengthened relationships with coalition partners - all to educate legislators on the important research we started last summer.

The legislature and Governor agreed to a $52 billion budget and avoided a shutdown all while accomplishing most of the goals that our committee advocated for, specifically:
  • The final tax bill passed into law fully exempted loans from the Paycheck Protection Program (conforming with federal legislation). Without this change Minnesota would have been one of a handful of states to count these forgiven loans as income. This came at a significant price tag but was a huge win for the industry and all our tenants.
  • Our team helped other organizations advocate for an extension in the state’s historic tax credit. We supported the House DFL position in conference committee that would have extended the historic structure rehabilitation credit sunset by eight years. Unfortunately, due to other budget considerations, the legislature punted in a sense and extended the credit for one year. Legislators on both sides of the aisle are committed to looking at this bill again next session and we will stay engaged with our coalition’s partners.
  • And in our proudest announcement, legislators reduced the state general levy (“SGL”) in bipartisan fashion by $21,000,000! We have long advocated for the elimination of the statewide general levy at the capitol and will continue to do so (there’s still plenty runway…). The reduction comes in the form of a value exclusion for commercial/industrial (C/I) properties for the first $150,000 of value. Current law is $100,000. Not only is this a big win for smaller tenants and buildings, but more so in the way of continued momentum of our efforts to chip away at the overall levy size!
  • Additionally, this is the first year for a Democrat to author a bill on SGL relief. As you know, Minnesota’s business climate continues to rank in the 10 worst for businesses mostly because of our tax climate which is inclusive of our unique state general levy. Recall that in the past five years we have eliminated the automatic inflator on this tax and reduced the overall levy by over $100 million for commercial and industrial properties.

The legislature reconvenes in January. While it is not a traditional budget year, we continue to advocate for our industry in the wake of a pandemic and economic recovery. We also continue to monitor potential local issues.

Last fall’s proposed Minneapolis ordinance requiring CRE owners to provide the city with 60-days advance notice prior to listing a property for sale was tabled through our coalition efforts and has not been revisited. Ongoing issues that will be addressed in the next few months by local councils and potential ballot measures include public safety policies, residential rent control, and redefined responsibilities for the Minneapolis mayor and city council.

We look forward to working with you on other important issues that are impacting you and your tenants. Thank you for your continued interest in our work and the contributions that have made it possible!


Shawn Smith signature

Shawn Smith
Chair, NAIOP Minnesota Public Policy Committee