Fiscal Rarity

A week after the hearing, scores of union workers were back at the Capitol for a rally. But in the end, the exemption failed to win support from the House or Governor Tim Pawlenty.

Not So Arcane After All

Rick Forschler, a lobbyist for NAIOP, and Kaye Rakow, the association’s public-policy director, credit Lenczew-ski for stopping the proposal. “I’m amazed at how much attention this drew,” Forschler says. “Fiscal disparities is an arcane topic.”

But its effects are easily understood. A Citizens League study shows that St. Paul benefited the most last year by picking up $20.5 million in tax base. Minneapolis was next, with a gain of $3.9 million. Bloomington contributed the largest amount, $14.1 million, followed by Eden Prairie, Minnetonka, Plymouth, Edina, and Roseville. But because most communities tend to both contribute and receive tax base from the pool, the arrangement doesn’t reduce or increase a community’s tax base radically. For instance, the league says that sharing cut the tax base per capita last year from $2,206 to $2,082 in Edina. In Columbia Heights, the base rose from $736 to $847.

Lenczewski believes the law needs some changes, but this year’s controversy did so much to educate legislators on how the system works that she won’t push for a new study of it.

Dan Jasper, the Mall of America’s public relations director, notes that business leaders opposed to the fiscal disparities exemption still support the mall’s expansion. He says mall officials are disappointed that legislators put the burden for public financing of the project entirely on Bloomington instead of providing regional or state support. Jasper adds that the mall is studying the package that did pass, and won’t break ground for the project this fall as had been expected: “Our hope is that we can begin construction next year.”

Meanwhile, Paul Gilje and others are celebrating. One of the fiscal disparities system’s earliest supporters in 1969, when he was associate director of the Citizens League, Gilje says the defeat of the exemption made 2008 “a banner year” for the system.