[Winona Online Democracy]
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This article from StarTribune.com
has been sent to you by Craig Brooks. *Please note, the sender's identity has not been verified. The full article, with any associated images and links can be viewed here. Craig Brooks wrote these comments: This article outlines all the 'new' fees Minnesota residents are paying now. What do you think about this as a way to pay for local services compared to income tax or property tax? |
| From free to fee Mike Meyers and Jackie Crosby, Star Tribune David and Stephanie Maggitt moved into their Golden Valley home nearly 20 years ago. Since then, its estimated market value has doubled, while their property taxes have increased 25 percent. But their real inflation story lies in a different set of numbers. This year, the Maggitts will pay $1,095 in city property taxes and more than one-third of that amount again in fees. They'll shell out $32 for recycling, $15 to maintain the streetlight outside their front door, $84 for storm-water drainage, $204 for sanitary se! wer and $6.36 that the city will collect from them for a new state lead-testing program. If David Maggitt joins the over-40 basketball league at the nearby community center, it'll cost him $3 a night. And if the family microwave goes on the blink, he'll have to haul it himself to the county recycling center and pay $15 to keep it out of the landfill. "Schools are strapped for cash, and kids are forced to work to pay [for] football and other sports. A person could be out $500 just on fees alone," David Maggitt said. Property tax bills in Minnesota come due every May and October, but those statements are telling less and less of the story in explaining the cost of government. A growing number of public services now come with a separate fee, creating something of a cafeteria system in which property taxes pay for the basics but other services come à la carte. This year, state and local governments will charge Minnesotans more than $2.2 bill! ion in this manner, and not a penny of it will be called a tax! . In 200 4, the most recent year for which comparative data are available, fees imposed by Minnesota cities amounted to 81 cents for every $1 in property taxes collected per person, according to the state Department of Revenue. Fees and charges represented nearly 24 percent of Minnesota city government revenue per resident that year. Meanwhile, the share of city budgets supported by state grants fell by 16 percent. Observers agree that the imposition of fees has been picking up speed in the two years since, as public officials struggle to balance budgets in the face of falling state aid. "More and more cities are looking at whether it makes sense to use fees to pay for things that have traditionally been financed by property taxes," said Gary Carlson of the League of Minnesota Cities, which has surveyed its more than 800 member cities for the past three years to see how they are reacting to financial strains. Running the gamut The fees are b! eing imposed at the state, county and city level and come in all sizes, from a 35-cent environmental fee on a pair of pants picked up at the dry cleaner to the "granny tax" -- a $2,800 state fee on nursing home care for people paying their own way. In some cases, the fees are based on usage, in others not. A single person living in a bungalow pays less for water than a large family with a swimming pool. But a driver's license costs everyone the same, regardless of whether a Minnesotan drives 400 miles a week or 40. What doesn't vary is that most fees take no account of a person's ability to pay. Patrick Born, Minneapolis finance director, said cities have been forced to find new sources of revenue to reconcile state aid cuts with popular demand that city services remain unchanged. "If expenses continue to grow and taxes are limited, then governments look to fees to fill the gap, if they're not going to reduce expenses," Born said. In Minneapolis, residents pay a fee for electricity, gas and cable television. St. Paul charges similar fees but also collects a fee if paramedics take you to the hospital by ambulance. Fast-growing suburban communities now charge developers cul-de-sac fees or swimming-pool fees -- costs that get passed along to home buyers. Perhaps the best-known fee was imposed in 2005 -- a 75-cent-per-pack levy on cigarettes intended to raise $400 million for the state. Lawmakers argued over whether to label the cigarette initiative a tax or a fee; regardless of the name, smokers had to pay. The semantics matter, however. Unlike state! income and local property taxes, taxpayers can't deduct the cost of a fee from their federal income taxes. A dollar in state income or property tax might really cost a Minnesotan about 70 cents, thanks to the associated federal tax deduction. But a dollar in fees costs a dollar. Casting wider net Supporters of user fees counter that they spread the costs of government services across a wider base, because hospitals, churches, schools and other nonprofits are exempt from property taxes but not from fees. The city of Maplewood is a case in point. Facing a double-digit increase in the property tax for 2007, city leaders instead decided to raise nearly $1 million by adding an electric-utility charge. If Xcel Energy approves the plan, the city will raise its residential property tax by about 4.4 percent, instead of 11 percent, said interim city manager Greg Copeland. "Some entities that aren't now paying will have to make a small contr! ibution to pay for public services. But we think that's a posi! tive for homeowners," Copeland said. Others fear there is a long-term price to be paid for the shift toward having government rely more on fees. Peter Fischer, who heads the city-appointed Parks and Recreation Commission in Maplewood, opposes the utility fee and said he has "serious reservations" about imposing fees for recreation programs and other community activities. "I have a daughter in tennis, a son who plays baseball, another daughter who plays volleyball," Fischer said. "Sometimes I don't see as much diversity [on the teams] as there is in our community. It raises the question: Is it because of the pricing? As you start raising prices, you lock out certain people who can't afford it." [EMAIL PROTECTED] 612-673-1746 [EMAIL PROTECTED] 612-673-7335 |
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