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Minnesota tax credit provides relief to farmers, greater chance for rural schools to build

In Minnesota, the chances of a local school district getting the money it wants to build a new facility or improve existing buildings can depend greatly on where it is located: In metropolitan areas, most school construction projects get approved by local voters; in rural districts, these proposed tax increases tend to fail. This discrepancy led to legislative action this year. As envisioned under a section of HF 1 (Minnesota’s omnibus tax bill that still needed final approval as of late May), new state tax credits would offset 40 percent of a school district’s bond debt load that is attributed to agricultural property-tax payers. Some 240,000 parcels of land would qualify for the credit.By providing relief to farmers, lawmakers hope that this group of local taxpayers will be more likely to vote “yes” on local referenda and less burdened by the costs of approved school projects.In some districts, farm families make up only a small percentage of the taxpayers and a local school’s students, but their land accounts for a majority of the tax base that must pay for a project. As a result, individual farms may wind up paying several hundred thousand dollars in additional taxes over the life of a 30-year construction bond.

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Stateline Midwest