Tax committee lays out bill to adjust homestead resort property tiers amid owners' concerns over rising valuations

The House Tax Committee laid out House File 18 29, a bill to adjust tier limits for homestead resort properties, after multiple resort owners and an association representative told the committee rising property valuations and unchanged tier thresholds have placed seasonal, family-owned resorts at risk.

Chair Davids moved the bill to the committee and Joel Carlson, a consultant representing the Community of Minnesota Resorts, and several resort owners testified that the tiered property-tax system for resorts was created in 2003 and has not been adjusted for tier limits since about 2008. They said the result is that tiers set years ago now capture property values that have increased substantially, driving higher tax bills.

"When you have Lakeshore that is selling for $10,000 a foot and they put that type of value on your property as a development property, it is really hard to remain in business for a seasonal property," Joel Carlson said. He described a decline in the number of family-owned resorts from a high watermark of about 3,000 historically to under 600 now and said the tier changes in the bill are intended to preserve the resort industry and the recreational access it provides to Minnesotans.

Resort owners described community, economic and quality-of-life benefits. Beth Klinsky, owner and operator of Knottie Pines Resort near Park Rapids, said her operation hosts roughly 135 families each season and generates about $12,000 a year in sales tax revenue for the local area. "Owning and operating a resort is... the most challenging job. And so, we appreciate any help and any support you can give us in what we do to keep, to keep those, our families coming up and just enjoying their week at the summer lake," Klinsky said.

Emily Norris, who owns Pamoosh Resort near Bemidji, described resorts' role in small-town economies and mental health, and said resorts often are multi-generation family businesses that local communities rely on to sustain stores, schools and restaurants. Michael Bolt of Cedar Point Resort described rising assessed values and taxes at his resort's location and said losing a resort has ripple effects on local businesses and jobs.

Committee members noted that altering classification rates or tiers can shift property-tax burdens onto other local taxpayers and asked staff to consider local budget impacts; Chair Gomez and other members urged careful consideration of municipal levy-rate differences across communities. Representative Davids renewed his motion that House File 18 29 be laid out for possible inclusion in the omnibus tax bill; the motion prevailed by voice vote.

Votes at a glance: House File 18 29 ' Motion: lay out for possible inclusion in omnibus tax bill. Mover: Chair Davids. Outcome: laid out for possible inclusion (motion prevailed by voice vote).