What is Fiscal Disparities?

“Sharing the Wealth,” created by the Minnesota Chapter of NAIOP (the National Association of Industrial and Office Properties) and the Citizens League, explains how fiscal disparities spreads property tax base around the region.

This publication is designed to inform business property owners on how fiscal disparities works and to promote a broader awareness of what the fiscal disparities pool is designed to do

From time to time, there are proposals to change the fiscal disparities pool or to use it as a source to subsidize various activities. Those who are affected by any potential changes should be well informed about how fiscal disparities works, and we think this publication does that in an effective way.

We want to thank NAIOP for undertaking this educational effort. Thanks are also due to Paul Gilje (long-time Citizens League member and former staff) for his advice and to Steve Hinze (House of Representatives Research Department) for his assistance.

• August-September Minnesota Journal (with fiscal disparities article)
• Table 3: 2006 Metro Tax Base Sharing at a Glance (Excel)
• Table 3a: 2006 Metro Tax Base Sharing By County (Excel)
• Table 3b: 2006 Metro Tax Base Sharing in 181 Cities and Towns (PDF)
• Table 3c: 2006 Metro Tax Base Sharing Grouped By Met Council Planning Areas (PDF)
• Table 4: 2006 Range Tax Base Sharing at a Glance (Excel)
• Table 4a: 2006 Range Tax Base Sharing in 190 Cities and Towns (Excel)

For more information about Fiscal Disparities see:
Minnesota’s Fiscal Disparities Programs,Minnesota House of Representatives Research Department, 2005 (PDF)

• April Minnesota Journal
• Tables 1-3, Metro Disparity Reductions
• Table 4, 2007 Metro Tax Base Sharing By County
• Table 5, 2007 Tax Base Sharing at a Glance
• Table 6, 2007 Metro Tax Base Sharing in 180 Cities and Towns
• Table 7, 2007 Metro Tax Base Sharing Grouped by Met Council Planning Areas

For more information about Fiscal Disparities see:
Minnesota’s Fiscal Disparities Programs,Minnesota House of Representatives Research Department, 2005 (PDF)

In the interests of knowledge and transparency, the Citizens League has annually calculated and published the change in tax base that results from fiscal disparities for every community in the Twin Cities metropolitan area and, more recently, for the communities that take part in the Iron Range tax-base sharing pool. This year, however, we have decided to instead discuss a long-term view of fiscal disparities and how best to evaluate its effectiveness.

First, we must ask: what information is important to know in order to evaluate the effects of fiscal disparities? Can effectiveness be determined by examining who contributes the most and who gains the most from the regional tax-base sharing pool? In reality, its performance is something much more difficult to evaluate.

It doesn’t make a great deal of sense to take a community-by-community view of a mechanism meant to support a strong regional economy, as we have done in preceding years, other than the fascination of watching the regional sands shift over the years. The Citizens League can continue to collect this data for each year and report it every three to five years with the same effect.

What we would rather do is search for ways to take a more meaningful look to promote a better understanding of fiscal disparities.

For more on why we have changed this study, see Bob DeBoer’s article in the June issue of the Minnesota Journal.

Click here for data on on the top contributors to (the regional “winners”) and beneficiaries from (the regional “losers”) fiscal disparities in 2007.