It seems that Murphy is doing something that might stabilize the crashing utility personal property tax rates — he’s authored a bill to set the rate at 2.5%, which over the last decade has been cut from 4.6% down to 2.1% and is now being again slashed by the Dept. of Revenue.  Xcel just takes and takes and takes, proffering the most lame excuse for its desire to be free of taxes: “We need to be competitive.”  Ummmm, folks, last I saw, we were one of the lower cost utility rate states, so if they want a level playing field, SHOULDN’T THESE TAXES BE RAISED????  SIGNIFICANTLY????

 Murphy’s S.F. 724

What does it all mean?  From House Research: Primer on Minnesota’s Property Taxation of Electric Utilities


So let’s see how far Xcel lets this bill go!


 Utility tax battle heats up

By Mike Longaecker, Capitol Bureau Staff Writer
The Republican Eagle – 02/22/2007

ST. PAUL — Minnesota communities facing sharp declines in their tax base found a sympathetic ear from Senate Taxes Committee members.

Communities that host the state’s largest electricity generating plants — Red Wing, Monticello and Becker — anticipate significant losses in property tax revenue from an impending Revenue Department rule change.

Last week, a state judge ruled in favor of a change in valuation rules that will reduce the amount of property taxes utility companies must pay to local taxing districts.

“Meanwhile,” Sen. Steve Murphy, DFL-Red Wing, told committee members Wednesday, “our residential homeowners are going to get stuck footing the bill.”

While observers expect the rule change to take hold in coming months, that didn’t stop leaders from some of the affected communities from urging lawmakers to fight back through legislation that aims to recoup much of the tax base expected to be swept away by the rule change.

A bill sponsored by Murphy would increase tax rates for utility companies.

“We took the risks. We entered into the agreements. We need some benefit,” Red Wing City Council President Carol Duff said at Wednesday’s committee hearing.

Red Wing and Goodhue County are host to Xcel Energy’s Prairie Island nuclear plant, which is among the companies poised to receive the tax breaks.

The city has seen a gradual decline in tax revenue from the utility. When the plant opened in the 1970s, officials agreed to pay great sums in property taxes since Red Wing leaders agreed to accept the risk of nuclear power.

Under the Revenue Department rule change, Red Wing’s residential property taxes would have gone up almost 7 percent without a stabilization agreement signed between the city and the utility.

The agreement calls for Xcel to reimburse Red Wing and Goodhue County for 10 years with the revenue lost had the rule change not gone into effect.

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