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Tracy Kid’s World tax status brought before Lyon County Board

August 3, 2011
By Deb Gau , Marshall Independent

MARSHALL - The tax status of a non-profit child care center in Tracy prompted some discussion at the Lyon County Board's regular meeting Tuesday. But while commissioners said they realized the importance of the issue, they could not take action on appeals for a property tax exemption.

Lyon County Assessor Dean Champine, and Deb Huffman and Gail Goltz of Tracy Kid's World, addressed the board regarding Kid's World's efforts to show it qualifies as exempt. Last year, the Minnesota Department of Revenue said its opinion was that the Kid's World property was taxable, Champine said.

Tracy Kid's World opened in 2008 with help of community contributions, and a $1.2 million loan from the USDA's Rural Development program. The facility now has an enrollment of 70 children. However, Kid's World is listed as being about $24,000 delinquent in county property taxes, and requests for tax-exempt status have not been granted by the county or state.

This year, Kid's World has submitted additional information to show the child care center meets statutory requirements to qualify as tax exempt. Huffman, the director of Kid's World, said the facility provides reduced-rate rental space for local Head Start programs and other community groups, and works with the nearby Tracy Area Elementary School to use the center's property for school activities. Around 68 percent of the children enrolled at Kid's World qualify for child care assistance benefits, and the organization does receive donations and childcare assistance reimbursements in addition to tuition from families, she said. However, letters from the Department of Revenue said that while Kid's World has shown that it is supported by donations, gifts or government grants, it does not meet other requirements for a charity to be tax exempt.

Huffman said the situation was frustrating.

"What else do we have to do to meet the requirements?" she asked.

Besides the property tax issue, Kid's World is also being threatened with foreclosure over payments on the USDA loan, she said.

Champine said he wasn't sure what additional information from Kid's World was needed to request an exemption, either. He suggested that if Kid's World wanted to appeal for tax-exempt status, it could do so with the Minnesota Council of Non-profits or in Minnesota Tax Court.

County board chairman Bob Fenske said commissioners were concerned, but didn't have the power to take action on the exemption. Kid's World's mission was "important to the county, that's for sure," Fenske said.

Later in the meeting, Lyon County Administrator Loren Stomberg reviewed a preliminary county budget and levy for 2012.

The proposed preliminary levy was about $12.6 million. That would be an increase of $442,000 or about 3.6 percent, from the 2011 levy.

"This is designed to help get the (budget) conversation going," Stomberg said. A final decision on a preliminary levy must be made by September. The preliminary levy may be lowered by the county, but it may not be increased.

In outlining the proposed budget, Stomberg said some county department budgets would also see changes from 2011. For example, the county recorder's office would have less revenue after losing the ability to process passports this year, he said. In some other cases, changes in department budgets were caused by organizational shifts. A 31 percent increase to the county administrator budget represented a staff transfer from another department, Stomberg said.

If passed, the levy increase would be the first in two years for the county. In 2010 and 2011, commissioners had voted not to increase the levy.



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