Tax Aids and Credits

Aids - Utility Value Transition Aid

Statewide Outcome(s):

Utility Value Transition Aid supports the following statewide outcome(s).

Efficient and accountable government services.

Context:

Sudden, significant changes to tax base can lead to financial strain for local units of government.

A 2007 rule change pertaining to the assessment of public utility property reduced the tax base of some jurisdictions. Utility Valuation Transition Aid (UVTA) was created to help compensate cities and towns for reductions in their tax base due to the assessment rule change. The aid was first paid in calendar year 2009 to 43 cities and townships with tax base reductions greater than four percent. The aid will continue for each qualifying municipality until the current valuation of public utility property exceeds its 2007 valuation under the old utility assessment rules.

Funding Source: State General Fund.

Strategies:

Compensate cities and towns with tax base reductions greater than four percent due to the implementation of a new rule pertaining to the assessment of utility property.

Results:

Local tax rates in affected taxing jurisdictions are lower than they would be without the aid, and the aid phases out as tax base returns to previous assessment levels.

Performance Measures Notes:

Number of eligible cities and towns compares assessment year 2007 (previous) to 2011 (current).

For additional information, visit the Revenue Department (http://www.revenue.state.mn.us/Pages/default.aspx) website and search ‘UVTA’.