Koochiching County Board Minutes 6-18-02

Board Minutes

for

June 18, 2002

OTHERS ATTENDING: Assessor Marty Cody, Auditor Joe Gust, Coordinator Teresa Jaksa, Joanne Finstad, Etta Erickson

The Board Chair reconvened the Board of Equalization meeting at 2:18 p.m. at which time the Board took property owner appointments.

Joanne Finstad, owning Lakeview Cabins in Ranier, informed the Board that based on the valuation increase for 2002 (taxes payable 2003) her taxes would go up $1,400. Her gross income on her business in 2001 was $25,000 and that the amount of taxes takes about 15% of the gross income. She does not feel that the area promotes or supports tourism businesses enough and that this type of tax increase makes it even harder for a business to obtain a reasonable profit margin. The Assessor stated that upon a citizen’s inquiry to the State on equal valuation, the State’s assessment resulted in substantial increases for waterfront properties and is the main reason for the increase. In addition, the property is non-homestead, which subjects it to a higher classification rate. He stated that there is a tax break for “Mom and Pop Resorts” but it does require the property owner to homestead the property. Ms. Finstad informed the Board that she does not qualify for homestead and that this is her business, not her desired homestead. Commissioner Chezick asked the Assessor whether assessment of the property was based on land and structure or by income? He stated it was done on land and structure and did not think that income valuation would make a difference. Ms. Finstad understood the situation and knew that probably nothing could be done. She stated that increasing her rates is not a solution because our market does not support it and that she will continue the business until such time as she deems it unprofitable.

Etta Erickson, owns farm and farmland in the western part of the County, inquired as to why some of her farmland without buildings went up in valuation. She also stated that the property is not prime acreage for farming. The Assessor stated that the majority of the increase came from changes in the 2001 tax reform. Prior to the reform agricultural property value up to $115,000 had a class rate of 35% (amount of valuation taken for tax purposes) and under reform increased to 55%. Valuation over $115,000 prior to tax reform was 80% and under the reform decreased to 55% so in summary, big farms received the break. The second reason for increases on agricultural property is sales. Individuals are paying large sums for recreational property and based on these sales, the State is requiring a 20% increase in valuation. Most of the new sales are filed stating the intended use is agriculture. Ms. Erickson asked why her neighbor with a house and less land received a tax reduction? The Assessor responded that homestead credit would apply here.

The Assessor informed the Board that properties owned by Dan Brutger and SunSpirit, Inc., parcel numbers #93-05-00040 and 93-06-00220 were reduced in valuation after reviewing the property upon receiving a request for re-examination. The reduction was not at the level requested but was merited after looking at the property. His recommendation on this matter will be submitted to the Board with his final report and recommendations on June 28, 2002.

With no further business, the Board Chair recessed the meeting at 3:12 p.m. and will reconvene on June 28, 2002 to conclude business and adjourn the 2002 Board of Equalization.