Opinion: A good tax fix for Minnesota
There has been a lot of arguing back and forth about whether property taxes across Minnesota will fall next year as projected by several sources, including the Minnesota Department of Revenue and the Minnesota House research department.
Rep. Paul Marquart, who represents Detroit Lakes in the Legislature, believes they will.
He says Minnesota homeowners will see a $109 million property tax decrease in 2014, citing recent reports from non-partisan House Research.
In total, property taxes in 2014 are projected to drop by $63 million on existing properties from 2013 levels, according to House Research.
The State Department of Revenue is projecting a $121 million drop.
Marquart credits the new DFL budget, which provided $130 million in Local Government Aid to counties, cities and townships.
It further helps local government by exempting them from paying state sales taxes. And it imposes a one-year levy cap.
And that’s not even taking into account an additional $135 million in direct property tax relief that will help homeowners and give a big boost to renters.
Businesses are also projected to see a property tax cut in 2014. That’s a big shift from the previous two years, when businesses absorbed $160 million in property tax hikes.
“This is great news for Minnesotans. Our families, seniors, farmers, and small businesses have watched their property taxes nearly double over the last decade and Greater Minnesota has been forced to bear the brunt of that,” said Marquart, a DFLer from Dilworth.
“This property tax relief will put more money in the pockets of middle-class Minnesotans and help our local economies.”
In total, Marquart said, the DFL budget provides over $300 million in middle-class property tax relief for Minnesotans through the Homestead Credit Refund, retooled renters’ credit and increased aid to counties, cities and townships.
The Homestead Credit Refund provides universal, targeted property tax relief to homeowners.
House Research predicts more than 300,000 homeowners (or 75 percent of filers) will see an average refund increase of $212. More than 150,000 additional homeowners will be eligible for a refund.
Marquart said the previous, Republican-controlled Legislature essentially raised property taxes on renters who earn less than $55,000 a year by cutting the Renter’s Credit.
The new budget fixes that, providing property tax relief to Minnesota renters (including elderly and disabled renters), so that the neediest renters see the greatest benefit, he said.
Under the improved Renter’s Credit, 66,000 filers will see a bigger refund, 10,000 additional renters will qualify, and the average renter will see their refund increase by $179.
A second House Research simulation found that statewide property taxes are projected to be $181 million (2.1 percent) less than they otherwise would be if the budget passed in 2011 by the Republican-led legislature was still in place.
The overall tax reductions are projected to be 3.6 percent in cities and towns in this part of the state, and 1.5 percent in the metro area.
The DFL budget may have whacked tobacco users and the wealthiest Minnesotans through higher taxes, but it clearly will provide some much-needed property tax relief. And that was a problem that needed to be fixed.