The Bemidji City Council's decision earlier this week to impose a street light fee is a bad decision and one that does not bode well as the city tries to capture additional revenue.
The council voted unanimously this week to impose, starting in May, a $2.50 a month "fee" on each residential taxable parcel and $5 a month on businesses. The "fee" will be used to operate and maintain the city's street light system.
Now wait a minute. Isn't the street light system something for the common good? Something provided for the public safety? Something enjoyed by all of us? It is not a service or something to which a user fee can be attached.
As a result, operation and maintenance of street lights should come out of the property tax pot, not sliced off as a user fee which, in reality, is indeed a local tax.
But let's look beyond the issue of a street light tax.
The state faces what could be a $7 billion budget deficit and Gov. Tim Pawlenty sees Local Government Aid to cities as low-hanging fruit to help backfill that budget hole. The Republican governor took $241,303 from the city of Bemidji in December as part of his unallotment of spending to balance the current biennium budget. He next proposes to take away $320,922 in LGA from the city the first year of the next biennium and $670,141 in fiscal 2010.
So let's raise property taxes to make up the difference, you say. The 2008 Legislature, at the insistence of Gov. Pawlenty, imposed a three-year levy limit cap of about 3.9 percent. With LGA making up a large portion of the city's budget, as it was intended to help cities with a low property tax base, the city has no choice but to skirt that limit.
A street light tax comes to mind.
The governor takes great pride in holding fast to his "no new taxes" pledge for six years now. But that pledge is phony, as cities and other jurisdictions must hit up the taxpayer in other ways -- more on those who can least afford it -- in new taxes and fees other than state income tax. A street light tax is a perfect example. State government itself has been plagued with various fee hikes and innovative "fees" that are taxes, such as the increase in cigarette taxes.
Minnesota's tax policy needs serious reform, a reform should that come with solving a $7 billion budget deficit.
And, by the way, will the last one out of the city please turn off the lights?