St. Louis County debates tax relief for small businesses

A property tax break is "well-intentioned," but may not pass legal muster, County Attorney Mark Rubin warned commissioners at a contentious board meeting.


St. Louis County will consider a property tax break for small businesses that have been forced to shut down as a result of the COVID-19 pandemic.

The County Board unanimously approved a resolution Tuesday directing administrators to look into the possibility of abatement for businesses affected by emergency orders issued last week by Gov. Tim Walz.

Bars, restaurants, gyms, theaters, hair and nail salons and other businesses where people congregate have been told to remain closed through at least Friday — though Walz has indicated those measures will almost certainly be extended as experts continue to urge distancing measures to slow the spread of the virus.

It was not immediately clear how many businesses could benefit, how much of a break they would receive or whether the move is even legal.

The board approved the resolution only after three hours of fiery debate that started when Commissioner Keith Nelson suggested slashing 25% off annual property taxes for businesses that have been forced to close their doors. Nelson argued it was an urgent issue, asking the board to direct the county's administration and auditor to quickly develop an application form for businesses before an initial payment deadline of May 15.


"I don't believe we should be charging them full property taxes given the fact that, quite frankly, through no fault of their own, they have been ordered to close by the governor of the state of Minnesota," Nelson said. "It's not that I don't agree with that. I do. But again, there has been tremendous harm done to these small businesses, and who knows how long this is going to last."

But County Attorney Mark Rubin strongly cautioned the board against moving forward with a specific abatement plan, noting it may very well violate the Minnesota Constitution. Rubin said the board has the authority to grant property tax relief, but only to correct valuation errors and classifications, in accordance with state law and county policy.

Rubin said the plan was "well-intentioned" but not time-sensitive, urging commissioners to allow county administrators and attorneys time to work through logistical and legal concerns.

"More than ever, the worst thing we can do to people, to our community, to our friends, neighbors and fellow citizens, is create a false hope," Rubin told the board.

"The task of supporting everybody, especially through abatement by your own policy, requires that all taxpayers and property owners are treated fairly and equitably and have equal access and consideration under the statutory procedures. By taking and carving out a class of small-business owners, you are creating a class that you want to treat differently. That's problematic."

Nelson's resolution did not define thresholds for small businesses. He did say in his comments that he intended for the relief to be given to those that have been forced to completely shut down, and not businesses that continue to profit from take-out or delivery services.

Commissioner Beth Olson noted that there are open questions about how state and federal resources may be directed to support small businesses, saying the board should not rush to adopt a specific plan when so much remains unknown about its impacts.

Olson said small-business owners aren't the only ones facing economic concerns. The county is legally required to provide many of its services, and cutting businesses a break could end up spreading financial responsibility to others, including people who have lost their jobs as a result of the pandemic.


"Does that mean we're going to cut services? Does that mean we're going to expect private homeowners to pick up some of the extra taxes?" Olson asked. "There's a lot of questions in here about what this looks like and who it impacts, and we just haven't had the time to even get that information because we've been appropriately prioritizing the functions that we need to deliver as a county to the public during a time of crisis."

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Tom Olsen has covered crime and courts for the Duluth News Tribune since 2013. He is a graduate of the University of Minnesota Duluth and a lifelong resident of the city. Readers can contact Olsen at 218-723-5333 or
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