Two recent court rulings favor Enbridge’s appeal of its state tax valuations. Those decisions will hit counties hard, particularly Red Lake and Clearwater counties, for whom the result of these rulings could mean a refund larger than their annual tax levy. The recent rulings say the Minnesota Department of Revenue overvalued Enbridge pipelines by as much as 38 percent between 2012-2016.
The impact of those rulings are still estimates, and the final impact is largely unknown. Still, Polk County Administrator Chuck Whiting told the Polk County Commissioners this week that six-figure repayments are likely for many counties, and some could even reach seven figures. “There is a whole series of these things now going back to taxes paid in 2013,” said Whiting. “Our concern is always that the valuation decided by a court is considerably less than when the state gave us the initial value because we don’t set the values on the pipeline, and that results in a property tax refund to Enbridge. We’re expecting that we’re going to have to do some, but it gets to sting a lot when it’s six figures or more. We’re not the only county this is affecting; it’s counties all along the pipeline route.”
By state law, tax refunds carry a four percent interest, meaning each time the ruling is changed, the interest value can swing drastically. Whiting said he thought the entire process needed to be overhauled, so things didn’t take so long. “I should note this is not Line 3 that we’re talking about,” said Whiting. “This is stuff that has been in the ground and valued for a number of years that they’ve been paying taxes on. It’s frustrating that it takes so long and is in amounts that we can’t do anything about it except sit and wait, sit and wait, sit and wait, and just dread the decision that comes. We’ve talked to our legislators over the years. They are aware of what’s going on, but there doesn’t seem to be any remedy in the short term because it’s a legal process. Long term, to me, it seems the entire process needs to be overhauled, so it doesn’t take this long. It’s not good public policy if you’re asking me.”
POLK COUNTY RESTRUCTURING
Whiting also introduced changes to the staff structure for the Finance and Taxpayer Service Center Departments. Whiting said one additional position would be created as the Director of Finance with a new job description, while the current Director position would be retitled as Finance Officer. “We’re trying to plan ahead,” said Whiting. “We’re going to add a position to the Finance Department. We’re going to keep the staff pretty much as is but try to bring in a higher-level management position to see how that goes. We want to make some software updates and do some planning for retirements and transitions that are likely to come in the future.”
No additional positions are being proposed in the Taxpayer Service Center. Still, staff roles could change with Deputy Director of Property Records’ introduction replacing the Tax Admin/Taxpayer Service Center Supervisor position, plus new titles of a Recording/Licensing Specialist and an Elections/Forfeiture Specialist. “Same thing in the Taxpayer Service Center,” said Whiting. “We’ve got some good talent over there as well, and we want to move some of the responsibilities around and take advantage of that to get us a future that we can sustain all the demands on that department with elections, forfeitures, land records, licenses, and stuff like that. Just looking down the road and seemed like a good opportunity to act now, and the board agreed, so we’re moving ahead.”
The County Commissioners approved the proposed department modifications this week, allowing a job description to be completed before likely contracting with a search firm for a Director of Finance. Whiting said that as the county progresses, they’ll figure out the budgetary impacts for 2022 and beyond. “It’s not a lot, but it is more,” said Whiting. “We’re going to have to figure out the budget impacts on that. A new Finance Director position would be the one add, but there will be plenty of work to do if we follow through on the new software that we’re looking at transitioning to. There are going to be retirements too. And we’ll access the staffing levels as we always do whenever there is a change. It is a transition, but as with everything, there are more decisions that make themselves apparent when the time comes.”
