The good news is that the state of Minnesota reached an agreement with CenterPoint Energy to end a lawsuit in tax court. The bad news is that agreement is costing Morrison County tens of thousands of dollars.
In Minnesota, the state assesses any land used for energy production and handles any tax court cases involving disputed tax payments. The counties that collected the taxes however, are the ones who will pay the money back.
This system was discussed at Tuesday’s meeting of the Morrison County Board meeting, namely because it happened, and now the county and the cities and townships in the system owe CenterPoint Energy $35,000.
Going forward, CenterPoint will pay on average, $10,000 less in taxes each year to Morrison County.
County Auditor-Treasurer Deb Lowe said the settlement affected 39 counties, many of whom are upset that the state told them to collect this amount of money. Then, when it was settled in tax court and CenterPoint Energy didn’t owe that much, The state told the counties to pay it back.
“The fact that the state sets these values and we’re the ones who have to pay them out feels a little bit unfair to a lot of the counties,” Lowe said.
She said this was the first agreement in tax court she’s seen and it came as a surprise to her.
“I have not seen one that reached a settlement yet. This is the first one,” Lowe said.
Out of the total $35,254.09 adjustment owed to CenterPoint for taxes in 2015 and 2016, about $21,000 was collected by the county, while the other nearly $14,000 was collected by cities and townships.
The city of Little Falls had the highest adjustment of cities and townships, with $8,133.39 owed.
Lowe said the county will pay back the full amount, plus 4 percent interest, if the Board approves it at Tuesday’s meeting and then recoup the townships’ and cities’ portions in June when tax money starts coming in.
Commissioner Jeffrey Jelinski said all 87 counties should be questioning this process, not just the 39 refunding CenterPoint.
Lowe said there is legislation to tie the state’s ability to assess these properties with a responsibility to pay the difference if it assesses property wrong.
Commissioner Mike Wilson said while this number is bad, some counties he talked to at the Association of Minnesota Counties were looking at an impact measured in the millions of dollars.
The Minnesota Department of Revenue declined to comment.