Marquart property tax plan aims to help the low income
ST. PAUL - Some Minnesota homeowners will get a property tax break funded by other homeowners if state House Democrats get their way.
And local governments would get a $53 million boost at the expense of multi-national corporations.
"More will benefit than pay in," Rep. Paul Marquart, DFL-Dilworth, said Monday as he announced the proposal.
All homeowners who pay more than 2 percent of their income in property taxes would benefit, said Marquart, House property taxes chairman. They would get money from the state via a refund check.
Much of the $207 million needed to fund the homeowner tax relief would come from eliminating the ability for Minnesotans to deduct property taxes from their income taxes. The plan would raise some homeowners' property taxes to cut others. However, Marquart and Lenczewski could not say how many Minnesotans would pay more and how many would get tax cuts.
House Tax Chairwoman Ann Lenczewski, DFL-Bloomington, said Minnesotans with large incomes, but pay low property taxes, would be examples of those whose property taxes would rise.
"Higher income people will not be benefiting from this as much as middle and lower," Marquart added.
Marquart and Lenczewski said the plan ties home taxes to income, which is a more fair way of taxing than today's property tax system that has little to do with income.
House Democrats' main goal is to lower taxes for middle- and lower-class families. Home property taxes have risen about 90 percent in the last seven years, Marquart said.
The proposal is similar to one last year that was funded by raising income taxes on the richest Minnesotans. However, since Gov. Tim Pawlenty and others oppose any tax increase, Democrats had to stick within current revenues.
Marquart said the proposal is a special value to families where one wage-earner dies or loses a job.
"You shouldn't have to move out of your house if a spouse dies or loses a job," he said. "This helps you weather the tough economic and personal times."
The other part of the bill would force some companies with operations in other countries who now don't owe income taxes to pay. That money would be directed to increasing state aid to cities $30 million, counties $20 million and townships $3 million.
The bill also provides mortgage foreclosure aid to homeowners and communities, provides tax breaks for farmers affected by bovine tuberculosis and lowers some farm property taxes.
Pawlenty knew little about the proposal, but said he fears any state action to lower local property taxes. That takes local governments -- those who impose property taxes -- off the hook for tax increases, he said.