Burnsville School Board Approves Tax Abatement Package for Emerson

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Taxpayers in Burnsville, Eagan and Savage will be picking up part of the tab for a business development in Shakopee.

Thursday night, the Burnsville-Eagan-Savage Board of Education approved a property tax abatement for Emerson Process Management, parent company of Rosemount, Inc. The measure passed 4 to 2, with Board Members Jim Schmid and Bob VandenBoom in the dissenting minority.

"We're being asked to collect a tax from all of our district residents to pass on to a private business. That does not seem right to me," Schmid said during the meeting. 

The abatement is part of a larger business subsidy package for the company, which has been concocted by to lure Rosemount into redeveloping a building near the Shakopee-Savage border. The subsidy agreement offers Rosemount Inc. about $6 million in incentives from the City of Shakopee, Scott County, the school district and the State of Minnesota, including $1.5 million in property tax abatements over nine years. Essentially, the three local governments would reimburse Emerson for a portion of the property taxes paid on the property, from 2015 to 2024.

The school district's share is the smallest, amounting to $366,925 total, or about $40,000 per year. The district will not count the abated money as a loss, however. Instead, the district is required by state law to levy the abated amount, which means that all the other property tax payers in the district will make up the difference. According to district Finance Director Lisa Rider, because of the abatement a taxpayer who owns a $200,000 home would pay an additional tax $1.32 per year. 

Small though it may seem, that's too much for Schmid and VandenBoom.

"If you think about the communities we serve, 80 percent of our residents don't have kids at school and 20 percent of the families we do serve are low or moderate income," VandenBoom said during an interview on Friday. "When you think about that the concept, of having the school board impose a tax on them without their consent, it just didn't feel right."

He added that he was especially uncomfortable with the fact that the school board would be levying money for non-educational purposes. At his suggestion, the company agreed to write a partnership program into the contact which would include "employee engagement" with the district (employees serving as mentors, science fair judges or volunteers with the robotics team) and company sponsorship of school technology initiatives. The contractual partnership somewhat assuaged VandenBoom, but was not compelling enough to change his vote.  

On the other side, were Board Member Ron Hill and Chair Sandy Sweep, who argued that the Rosemount plant could spur further development in Savage and other cities on Highway 13.

"I will vote yes. I struggled with it for a long time, but I will vote yes because of the opportunities that will come out of this," Hill said.

Though the package has been approved by all government entities involved, it is not yet known if Rosemount will accept the deal. If the company agrees to take the package, they will be contractually obligated to build on the site and create 400 jobs within five years.