January 25, 2019

The 2019 Minnesota Legislature is in session, and although few bills have received hearings thus far, this is pretty much par for the course. Until the February economic forecast is released, legislators will not know how much money is available to address their priorities for this session.

House and Senate Priorities

Earlier this month, the new DFL leaders in the Minnesota House of Representatives shared their priorities for the 2019 legislative session in 10 pieces of legislation touted as the “Minnesota Values Agenda.” Rep. Liz Olson (DFL-Duluth) said the legislation emerged after conversations lawmakers had with Minnesotans and community groups about the future of the state over the next two years. The proposals address everything from affordable healthcare to expansion of rural broadband to paid family and medical leave.

Senator Paul Gazelka (R-Nisswa) has outlined a legislative agenda that focused on tax relief for seniors, veterans, farmers and business owners. He has de-emphasized some of the priorities named by House leaders, encouraging Governor Walz to seek ways to minimize the growth of government and return surplus funds to taxpayers.

Property Taxes

This year, Minnesota’s property tax collections could approach $10 billion for the first time in our state’s history, according to the Minnesota Department of Revenue. The increase in local taxes comes as the state’s two-year budget has grown by roughly $9.5 billion over the last eight years – now exceeding $46 billion.

In the past, the statewide business property tax and its automatic inflator have been used as easy targets to provide budgetary relief at the Capitol, and this year will be no exception.

This tax is incredibly burdensome for business owners. Business property is already assessed at a higher rate than other types of property, and the statewide business tax makes that gap even wider. NAIOP and other business organizations were successful at eliminating the automatic inflator in 2017, but eliminating or greatly reducing the statewide business tax is still a high priority for our members.

Transportation

NAIOP Minnesota will also be watching other legislation closely, including the debate about transportation funding. Governor Walz has already announced his support for a gas tax increase, but NAIOP is looking for legislators to offer additional creative solutions that reflect how transportation is changing.

A robust transportation system that includes multiple modes of transit is critical to our businesses, tenants and state. While NAIOP hasn’t weighed in on specific proposals, we continue to encourage members to find a solution and educate them about how it impacts Minnesota’s commercial real estate industry.