Jill Schramm/MDN Minot City Assessor Ryan Kamrowski takes questions at a city council meeting Monday regarding property taxes on childcare centers. Council members shown are Mike Blessum, left, and Lisa Olson, right.

A number of Minot childcare centers will become subject to property taxes with the Minot City Council’s 2-4 decision Monday rejecting a proposed tax exemption.

State law allows cities to approve tax exemptions for for-profit childcare centers and adult daycares. Home daycares are excluded.

City Tax Assessor Ryan Kamrowki estimated about five for-profit childcare facilities are currently operating in assessed buildings that they either own or lease. Their estimated consolidated tax is about $40,000, of which the city’s share would be about 30%, he said.

Kamrowski presented a list of 10 properties that are believed to be taxable because of the presence of childcare centers that are not being assessed, such as churches that host centers.

Kamrowski also estimated those 10 properties would pay about $100,000 in consolidated taxes if assessed. Childcare centers that operate as nonprofit are tax-exempt, and there are some in Minot that fall into that category.

Council member Scott Samuelson said the cost to the centers shouldn’t be significant enough to be a concern, based on what parents already pay.

Council member Lisa Olson responded the margin for profit in childcare is slim, and the property tax could be a determining factor in whether a center remains open. Olson chairs the city’s committee on childcare, which forwarded the idea of an exemption to the council.

“As we have met over the last year and half, the message we have heard over and over again is that there is not enough childcare. For many families, it is not affordable, and we believe that if we make the determination that these childcare centers should be levied property taxes, those costs will be put on the shoulders of families, making it more difficult for them to pay for childcare, and it may make it more difficult for those businesses to actually stay open,” Olson said.

Council member Rob Fuller said he leases property to a childcare center on which property taxes are paid. If those taxes go away and the lease amount decrease accordingly, the center saves about $5,000 a year. How much benefit would the center and parents really see from that amount of savings, he asked.

Council member Paul Pitner acknowledged the need for more child care but indicated there are better solutions.

“I think this is something best suited for the free market, for an entrepreneur to come in and fullfill that,” he said.

Council member Mike Blessum agreed.

“When we do any type of a process that is an abatement of those taxes, everybody needs to understand, it’s not that the city takes in less money. It’s that we spread it to the next taxpayer,” Blessum said. “There’s a market demand here, and it’s not registering, for me, why that’s not turning into profitable businesses for the right entrepreneur. And that’s, I think, really the challenge. The market seems to be broken to a certain extent, and I don’t think we have great answers for that right now. I think we’ve talked about a few different ways why this isn’t going to get us there, but it doesn’t mean the conversation stops. I think the community needs to solve this problem for itself and figure out how to do it.”

Olson and Mark Jantzer voted for the exemption for childcare centers and adult daycares. Voting against were Pitner, Samuelson, Fuller and Blessum.

Petitions filed for mayoral election

Petitions calling for a mayoral election were turned into City Hall on Monday.

More than 400 signatures were collected, according to Charles Tuttle, who circulated petitions with Josiah Roise. Roise, who turned in the petitions, also announced he plans to be a candidate for mayor.

Petitions require at least 293 validated signatures.

Other petition efforts also have been undertaken but the status was unknown as of Monday night.