Rogers Voters Reject City's Subsidy Policy in Local Elections

Voters in Rogers, a city of 6,000 residents northwest of the Twin Cities, have rejected the city's long-standing practice of offering public subsidies to businesses. The backlash against the city's use of tax-increment financing, a subsidy tool that captures property taxes to help pay for development costs, was evident in the recent election where three candidates campaigned against the city's penchant for handing out subsidies. Among them were Mayor-elect Paul Przybilla and City Council members-elect Steve Rauenhorst and Jamie Davis, who all won after stressing their opposition to public subsidies. This shift in policy comes as a result of the city's overuse of tax-increment financing, which has seen 27% of Rogers' total tax capacity captured by the subsidy in the six years leading up to 2005.

Key Takeaways:

Rogers has been the leading city in Minnesota for public subsidies, with 27% of its total tax capacity captured by tax-increment financing between 2000 and 2005.
The city's subsidy policy has been criticized for overuse, with many businesses receiving subsidies regardless of their need for them.
New Mayor Paul Przybilla and City Council members-elect Steve Rauenhorst and Jamie Davis won after campaigning against the city's subsidy policy.
Tax-increment financing is a subsidy tool that captures increased property taxes to help pay for development costs, such as land acquisition and site preparation.
The city's subsidy package for Cabela's included as much as $3.5 million in tax-increment financing and $1.5 million in city property tax abatements.
Cabela's will pay $120,000 in city property taxes next year, despite receiving a subsidy package that includes a partial exemption from property taxes.
Gary Eitel, the 22-year city administrator, believes that Rogers' sponsorship of subsidies has enabled the city to blossom into a city with a sufficient tax base to finance schools and parks.

Statistics:

27% of Rogers' total tax capacity was captured by tax-increment financing between 2000 and 2005.
Rogers topped all cities in Minnesota with at least $1 million captured in tax-increment financing between 2000 and 2005.
$5 million in public subsidies was given to Cabela's, a retailer that recently opened in Rogers.
The city's subsidy package for Cabela's included as much as $3.5 million in tax-increment financing and $1.5 million in city property tax abatements.
Cabela's will pay $120,000 in city property taxes next year, despite receiving a subsidy package that includes a partial exemption from property taxes.
Rogers has 6,000 residents and a tax base big enough to finance schools and parks.

Sources:

Citizens League of Minnesota
City of Rogers
Mike Kaszuba, Staff Writer (no date)