Minn. tax committee hears broad objections to governor’s SF 2374: sales-tax expansion, county aid cuts and conservation programs targeted

The Minnesota Senate Taxes Committee continued testimony on Senate File 2,374 on March 25, 2025, hearing more than a dozen witnesses representing counties, conservation groups, legal and financial professions and tax practitioners about the bill’s combination of an expanded sales-tax base and reductions in several state aid programs.

Supporters of current county aid and conservation funding told the committee cuts would shift costs to property taxpayers and risk outcomes ranging from fewer local inspections for aquatic invasive species (AIS) to reduced stewardship of private forestland. At the same time, industry groups and tax professionals urged caution about the governor’s proposal to broaden the sales-tax base to include professional services such as legal, accounting and financial advice, calling the definitions in the bill vague and the compliance burden large.

“The abstract 34% cut across PILT payments to counties … will — and it’s important to know that PILT really is a partnership with the state and its communities,” Matt Hilgert, who said he works for the Association of Minnesota Counties, told the committee. Hilgert gave Koochiching County as an example: “Koochiching County…has 2,000,000 acres of total land. 1,400,000 acres of their land is PILT eligible…A 34% cut to their PILT means $1,500,000. Now that doesn't sound like a whole heck of a lot, but what it really means is a 19.73 levy increase right off the bat to replace those…