Session Week 10: Dayton Releases New Budget with No Surprises
Last Thursday Gov. Mark Dayton presented a revised budget that is quite similar to the one he released in January. Anchoring his budget is the creation of a new top bracket for income taxes, which would affect taxable incomes of $150,000 and up for individuals and $250,000 and up for couples. Joining the income tax increase is the cigarette tax with slight modifications. Gone are the B2B sales tax provisions, along with his entire sales tax overhaul, which included extensions to sales, personal services, etc. Dayton also cancelled his $500 property tax rebate. With the revised budget on the table and policy committee work wrapping up this week, the budget discussions will begin to take shape.
Committee Deadlines Update
Nearly 600 bills graced the committee schedules last week as the drive to clear the first policy committee deadline was in high gear. For homebuilders and remodelers it was slim pickings as the menu was peppered with bills that BATC opposes. With one deadline behind us the pace will lighten somewhat this week, though there will still be several initiatives moving through the process that pose challenges for our industry. Among those moving and impactful to BATC members are:
Street Improvement Districts – The annual effort by local governments to acquire new authority to charge a street improvement fee continued its march through the House Committee process by clearing two policy committees on party-line votes. This is significant, given the strong coalition opposition from business, non-profit and faith-based groups. The primary objective for BATC is to ensure that this new authority does not place our members in a position where we are paying twice for street improvements during the development and building processes. Street and infrastructure fees are paid by builders and developers in the development process and built into lot costs. This would open a new window for revenue that could add major costs to homebuilding projects. The bill moves into Senate Committees this week.
Park Facilities Fee - Similar to the street improvement fee authority, a push to allow for the inclusion of a park facilities fee added to a parcel owner’s property tax was slated for hearing last week. Again, like the park fee concept, BATC opposed this measure primarily on the grounds that we already pay substantial park dedication fees at the building permit stage. As written, the bill would not exempt properties which have paid a park dedication fee. Responding to concerns from BATC and BAM, the bill was removed from the agenda for further study in the interim. Expect this bill to re-surface next session.
Radon Bills – The push by the MN Department of Health for mandatory radon disclosure in all real estate transactions continues to move steadily through the committee process. The parallel effort to mandate radon testing as part of every residential real estate listing has slowed and now appears less likely this session.
Anti-Indemnification/Risk Transfer Bills – Also continuing its march ahead are two initiatives which would change construction contract indemnification and insurance clauses by making them void and unenforceable. The MN Subcontractors Association is pushing for a blanket prohibition on these provisions, while another bill favored by architects and engineers would carve out an indemnification specific to those services.
