Group says new taxes benefit outstate MN
Last year, the Minnesota DFL-controlled Legislature raised income taxes on the top 2 percent, and levied a 75 cent per-pack cigarette tax.
(It also approved three business-to-business sales taxes, which were dropped this year.)
Bracing for an onslaught of Republican ads attacking DFL incumbents for raising taxes last year, the think tank Minnesota 2020 has decided that the best defense is a good offense.
Founder and board chair Matt Entenza, a former DFL leader, has been traveling the state to get the word out that the new taxes have benefitted the vast majority of Minnesotans, including those in Becker County.
Over the past 10 years or so, under Republican Gov. Tim Pawlenty and later under Republican legislative leadership, “aid for cities and schools went way down, so property taxes went up to offset it,” Entenza said during a stop in Detroit Lakes.
In the Detroit Lakes School District, for example, state aid fell nearly 16 percent from fiscal year 2003 to 2012, and the property tax levy rose by 670 percent.
Even with the higher property taxes, which peaked at about $800 per student in 2011, the district’s overall revenue still fell by more than 7 percent during that time period.
Under DFL leadership (from 2012 to projected 2015) state aid to Detroit Lakes Schools is up more than 7 percent, the property tax levy is down more than 16 percent, and overall revenue is up 5 percent.
Under Republican leadership, state aid to the City of Detroit Lakes (called Local Government Aid) fell drastically from nearly $2.3 million in 2002 to $707,000 in 2012 — a 69 percent cut.
Under DFL leadership it fell further to $703,000 last year before being boosted to $782,000 this fiscal year.
“If you adjust for inflation, you had a 65 percent decrease in Local Government Aid,” Entenza said. “Gov. Pawlenty tried to eliminate the program … Our position is LGA is especially important to regional centers like Detroit Lakes.”
The DFL also beefed up the property tax refund program, particularly for seniors and low-income residents. “But most folks are probably going to get something,” he said.
The renter’s credit also got a boost. Entenza says taxpayers should take a close look at those programs to see if they qualify.
“Gov. Dayton supersized the renter rebate and the homeowner credit,” Entenza said. “We don’t think these things should be partisan, but the reality is Gov. Dayton has been much more supportive, and as a result, people are going to get their property taxes down.”
When the new refund program is calculated in, the average property tax bill in Detroit Lakes fell by 19 percent from last year to this year, from $1,600 to about $1,300. That’s one of the most substantial reductions in outstate Minnesota.
“Cities in this area do particularly well with the residential rebate,” Entenza noted.
“Critics say taxes are up, up, up,” Entenza said. “The truth on the ground is that taxes are going down — as long as people file for those rebates, they’ll see about a 20 percent reduction on their property taxes.”
And those rebate checks are often spent locally, helping the local economy, he said.
New spending is only beginning to make up for 12 years of very substantial cuts, Entenza added.
In the Frazee-Vergas school District, for example, state aid fell more than 17 percent from 2002 to 2012, and while the levy increased by over 3,000 percent — to $1,500 per student — it still did not offset the loss of state aid, and overall revenue fell by nearly 2 percent.
Under DFL control, state aid to Frazee-Vergas Schools is up more than 7 percent (from last year to projected 2015), the levy is down, and revenue has ticked up into the black.
The story is the same at the Lake Park-Audubon School District: From 2002 to 2012, state aid fell by more than 23 percent. The levy went way up to offset it and overall revenue still declined by more than 7 percent.
Under the DFL, state aid to LP-A from 2012 to 2015 will increase by more than 7 percent, the levy will drop, and overall revenue will increase by 3.5 percent.
The Waubun-Ogema-White Earth School District really took a beating from 2003 to 2012. State aid dropped by more than 20 percent. The levy went up and total revenues fell by more than 17 percent.
Now, state aid is slated to rise more than 6 percent. The levy will continue to rise moderately, and the overall revenue increase is pegged at about 7 percent from 2012 to 2015.
At the city level, Callaway saw a $7,000 bump in LGA this year, to about $42,000.
Ogema received a $6,000 bump in LGA, to about $33,000.
Audubon saw a $16,000 jump in LGA, to $116,000.
Lake Park received a jump of about $18,000 in LGA, to $253,000.
Wolf Lake saw an increase of about $1,500, to $9,600.
In short, Entenza said, “State spending is not up — it’s still substantially down from where it was before 10 years ago, and taxes are lower.”