Personal Property Tax Repeal on Fast Track -- Public Hearing this Week

The Senate Committee on Economic and Workforce Development is holding a public hearing tomorrow on SB 189, repealing the personal property tax on businesses. Immediately following the hearing the committee will vote on the bill. According to Senate staff, the full Senate will vote on the bill on June 30, the same day the body will take up the state budget, which contains a $202 million appropriation for making payments to local governments to hold them harmless for the lost revenue caused by repeal of the personal property tax.

The Committee will be voting on a Substitute Amendment to the bill, which appears to incorporate the technical changes that the League, the Counties Association, and other local government stakeholders had recommended to the authors earlier in the year.

We anticipate that the Assembly companion bill, AB 191, will be advanced on the same fast schedule.

The League has taken a neutral position on this legislation. The substitute amendment addresses our technical concerns and includes a personal property aid program to reimburse communities for the lost revenue caused by the repeal. The aid program does not sunset. We have informed the authors of the bill that we would move our position to support if it was amended to provide for an annual inflationary increase in the hold harmless payments made to local governments.

Opioid Litigation Bill on fast Track - Establishes June 1 Deadline for Municipalities to File Lawsuits

Both houses of the Legislature are poised to pass a bill, AB 374/SB 386, that was introduced in the first week of June relating to the settlement of the multidistrict opiate litigation. The bill requires the attorney general to cooperate with local governments that are parties to the multidistrict litigation titled, National Prescription Opiate Litigation, Case No.: MDL 2804, in entering into a joint settlement agreement of the claims of the state and local governments regarding opioids with any person engaged in the manufacture, marketing, promotion, distribution, or dispensing of an opioid product.

The bill requires that moneys payable in a settlement to local governments be paid directly only to local governments that are parties to the multidistrict opiate litigation.

Under the bill, if a municipality is not a party to the multidistrict opiate litigation on or before June 1, 2021, it may not maintain a claim to proceeds of a settlement of the multidistrict opiate litigation and may not maintain any claim or commence any action against a person that is a defendant in the multidistrict opiate litigation and that would be released in a settlement agreement of the multidistrict opiate litigation.

If your community is concerned about this bill, please contact Curt Witynski or Toni Herkert at the League.

JFC Finishes Working on 2021-2023 State Budget

Last week, the Joint Finance Committee (JFC) concluded its work on the 2021-2023 biennial budget by passing several budget motions, including motion 117, which contained the following provisions impacting municipalities:

  • Video Service Provider Fee. A $5 million annual increase in the Video Services Provider Fee Payment to fund the program at just over $10 million annually which is sufficient to pay the estimated increase in the fee payments owed to municipalities, and
  • Personal Property Tax Repeal Hold Harmless. The motion provides for just over $202 million in JFC's supplemental account for the purpose of holding municipalities harmless for when the Legislature passes separate legislation later this session repealing the personal property tax on businesses, if the Governor signs the bill.

The Committee also passed a final clean up motion, motion 2001, which included the following two provisions affecting municipalities:

  • Aids in Lieu of Property Taxes. Require the Department of Natural Resources (DNR) to pay $3.50 per acre for aids in lieu of taxes on all lands acquired by the DNR before July 1, 1969, including $3.20 from GPR and $0.30 from the forestry account of the conservation fund. Set the minimum payment for aids in lieu of taxes on lands acquired between July 1, 1969, and December 31, 1991, at $3.50 per acre. Require DNR to pay no less than $3.50 per acre for aids in lieu of taxes on lands acquired since January 1, 1992, for each acre or portion of an acre in each taxation district (a town, village, or city). (Note: This provision increasing DNR PILOT payments mainly helps towns, but a few cities and villages will also see increased PILOT payments for DNR owned land located in their borders.)

  • Bump in Stewardship Local Government Assistance Grants. Modify Motion #102 to increase the annual allotment for Knowles-Nelson Stewardship program local assistance grants by $1,250,000, from $8,000,000 to $9,250,000 during the four-year program reauthorization from 2022-23 through 2025-26. The current law allotment for the local assistance grants program is $6 million. The Governor had recommended the local assistance grant program be increased to $13 million.

Not unexpectedly, but frustratingly, the Republican led JFC took no action on the following municipal priorities:

  • No increase or decrease in funding for the County and Municipal Aid program (shared revenue).
  • No Increase or decrease in funding for the Payments for Municipal Services program.
  • No increase or decrease in funding for the Expenditure Restraint Program.
  • No changes to levy limits.

By the end of June, the Assembly and Senate will take action on the version of the state budget recommended by the JFC. The Governor will then be presented with the Republican led Legislature's state budget. At that time, he must decide whether to veto the entire bill or sign it into law after using his line item veto powers to modify it more to his liking.