Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Local Revenue topic
No spam. Unsubscribe anytime.
Minneapolis BET debates local revenue options: income tax, land transfer tax, voluntary PILOTs and vacancy fees
Summary
At their Nov. 12 meeting the Board of Estimate and Taxation discussed a range of potential revenue tools — local income tax on high earners, a land transfer tax, voluntary PILOT payments from tax-exempt institutions and higher vacancy/parking fees — and agreed to await a consultant briefing before sending formal feedback to City Council.
The Minneapolis Board of Estimate and Taxation spent a substantial portion of its Nov. 12 meeting discussing potential local revenue sources to advise the City Council. President Steve Brandt framed the discussion as preliminary and advisory, saying the council had asked for the report to come to both bodies and that the BET should identify any initial consensus for the council’s legislative agenda.
Brandt outlined ranked options. He described expanding the downtown liquor and restaurant taxing area and urged consideration of statutory change to permit the city, as a home-rule jurisdiction, to set such boundaries. "It seems to me we know the city best and legislators from all over the state don't," Brandt said, urging the council to consider amending its legislative agenda to seek authority over those taxing boundaries.
Brandt said his first conceptual choice was a local income tax on higher households but acknowledged voter concern about potential tax flight and asked staff to research metropolitan examples using census income stratification. He also raised a land transfer tax as a second priority, citing state and Hennepin County precedent and noting the tax tends to apply when sellers are 'flush with cash.' Brandt recited example figures — a roughly $825 charge on a $250,000 sale under existing state rates and a county portion of about $0.25 per $500 of sale price — and asked for legal review to determine whether a referendum would be necessary.
On voluntary payments, Brandt pointed to Boston’s model: a per-capita yield that, he said, could reasonably be expected to translate to about $40,200,000 for Minneapolis based on population. He also raised the idea of publicly listing PILOT participants, as Boston does, to encourage participation.
Vice President Pre Stinson emphasized that voters judge taxes by how dollars are spent and proposed nearer-term measures the city could pursue without state action, such as payroll taxes on corporate entities, a luxury tax on capital investments and increasing vacant-property fees. "Some of the things that speak to me… are payroll taxes, from the corporate entities that we have in our city, as well as a luxury tax on capital," she said, and argued the city should also pursue enforceable policies to convert revenue into rehabilitation and services in affected neighborhoods.
Commissioner Payne said the group must be "laser focused" in state-level requests and described the issue as a structural funding problem for downtowns nationally. Miss Sherabane, a park commissioner, urged consideration of an entertainment tax to support parks and noted Chain of Lakes’ heavy visitor use.
Board members agreed it would be premature to form a final position until after a consultant briefing expected before year-end; Vice President Pre Stinson recommended collecting members’ views and possibly sending a memo to the City Council after that briefing. President Brandt said he would send Director Hawkins a memo requesting additional information on the options discussed.
The discussion produced no formal votes on revenue policy; it was recorded as an advisory, information-gathering session.
