Gazelka: Ag2School tax credit brings needed relief to farmers, schools

This November, as school districts across Minnesota look to keep up with growing facility needs, changing technology, and increased security concerns, many will put bond issue referendums before their voters. This includes districts in our area, such as both Pillager and Wadena-Deer Creek.

Historically, geography has dictated if local school districts were successful in getting the money they want – and often need – to build new facilities or renovate existing buildings. In metropolitan areas, school referendums have a much higher probability of passing than in rural areas, largely because of the property tax burden on farmers and landowners in Greater Minnesota.

But as these districts look toward the future, the Republican-led legislature has their backs. When Republicans took control of the state senate this year, one of our top priorities was to provide meaningful tax relief to as many Minnesotans as possible.

We passed a $648 million pro-growth tax plan that provides relief for taxpayers across the state – and particularly in Greater Minnesota. According to the Minnesota Farm Bureau, farmers in some rural school districts are required to pay up to ten times as much as other taxpayers in those same districts, making up a significant portion of the total tax base.

For many of Minnesota’s rural communities, this was an unsustainable model. Over the past decade, farmers have found themselves facing skyrocketing land values and increased costs, while the prices of commodities, such as corn, have fallen significantly. At the same time, farmers have seen property taxes increase nearly 150 percent.

We heard you – and we delivered.

One of the many positive outcomes from the historically-productive 2017 legislative session is the Ag2School tax credit – a reduction of the tax levy impact on agricultural property and timber land by at least 40 percent, applicable to existing, proposed, and future bond referendum debt service.

In plain terms, this means that the state will now pick up a larger share of the cost of these school projects and, in return, farmers will see a 40 percent decrease in their share of a school bond.

Beginning January 1, 2018, an estimated 240,000 parcels of land will quality for this property tax credit. A farmer that once paid $25 per acre, for example, now will receive $10 from the state as a credit on their property tax bill.

The Ag2School tax credit was a bipartisan measure that received overwhelming support from both sides of the aisle – and for good reason. According to the Minnesota Rural Education Association, about half of the state’s schools were built before 1976, and a quarter are between 54 and 125 years old. Yet, on average, school buildings have only a 60-year life span.

With districts across Minnesota asking voters to approve bond referendums for maintenance, more classrooms, and renovated gathering space, the good work done this legislative session will help these districts better serve the needs of their communities – and I think that’s something we can all agree is good for Minnesota.

You can find more information about the Senate Republican “Advancing Minnesota” agenda on our website: www.MNSenateRepublicans.com.