If the state offered to buy a large chunk of private land and a county could choose either getting a lump sum worth about 25 years of what would otherwise have been paid in private property taxes or being paid annually – in perpetuity – something in lieu of but not as much as what would have been paid in private property taxes, which should it choose? The county board discussed scenarios similar to this at its regular meeting Tuesday, February16, 2010.
Commissioner Jim Johnson reported that the state is considering purchasing private land on Lake Vermilion in St. Louis County and making a one-time payment to the county instead of adding the acreage to its payment-in-lieu-oftaxes (PILT) parcels.
The governor is proposing to use public money to buy land that would no longer generate property taxes. That, Commissioner Bob Fenwick said, will drive private property taxes up in the rest of the county.
According to Fenwick, the state is considering using funds from the ¾% Outdoor Heritage Fund tax to pay St. Louis County a lump sump of 20% of the sale price – this would amount to about 25 years of payment in lieu of taxes. Land lasts a lot longer than that, he said.
“We’ve got to fight that,” said Commissioner Fritz Sobanja.
If he were a business, Fenwick said, he would take a lesser amount of up-front cash instead of smaller payments over the long-term because he could make more money by investing the up-front cash. Counties cannot make money that way, he said.
A one-time payment would leave “nothing for the future generations,” Commissioner Johnson said.
The board talked about an upcoming meeting with the U.S. Forest Service and the Minnesota Department of Natural Resources regarding the potential sale of Cook County land in the Boundary Waters Canoe Area Wilderness. Instead of losing county-owned acreage, Commissioner Sobanja said, “we’ve got to trade that land. …Give us a huge chunk on the shore! Give us another piece of Sag!”
In other news, Commissioner Fenwick said he would be testifying before the legislature on lowering the requirement for passage of a referendum authorizing counties to own a telephone system from 65% approval to 50%. Last November, more than 50% but less than 65% of Cook County’s voters said yes to a referendum question that would have authorized Cook County to operate a telephone system. If it had passed, building a threepronged fiber optic communications infrastructure that would deliver phone, Internet, and TV countywide would have been more financially feasible. Phone service is the most profitable of the three amenities.
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