A lawmaker's response: Minnesota lawmakers delivered on property tax reliefThe News Tribune’s Nov. 15 “Our View” editorial regarding property taxes (“Tax break in 2014 looking doubtful”) correctly stated that Minnesota homeowners deserve real
By: Rep. Jim Davnie, Duluth News Tribune
The News Tribune’s Nov. 15 “Our View” editorial regarding property taxes (“Tax break in 2014 looking doubtful”) correctly stated that Minnesota homeowners deserve real
property-tax relief; after all, these homeowners have seen their property taxes skyrocket by 86 percent over the past decade.
Unfortunately, the editorial ignored key elements of our plan to end the decade-long trend of skyrocketing property taxes. Most notably, the editorial focused narrowly on preliminary tax levies while leaving out the most significant property tax relief passed by those of us in the Minnesota Legislature this past year: property-tax relief that goes directly to the pocketbooks of Minnesota homeowners and renters.
The 2011 Republican-led Legislature eliminated the market value homestead credit and slashed the renter’s credit, effectively raising taxes on more than 300,000 Minnesota renters earning less than $55,000 per year. Minnesotans clearly rejected those priorities. Through emails and phone calls — and, ultimately, their votes — they called on us in the Legislature to do better.
That is why we provided
$140 million in direct property-tax relief through the homestead credit refund this past year while improving renter’s credit, both of which will kick in in 2014.
The homestead credit refund will work like the existing
property-tax refund except more Minnesotans will get more tax relief. More than 300,000 homeowners will see a property-tax refund increase. More than 100,000 additional homeowners will be eligible for a refund. The average Minnesotan will see a refund increase of $212. And, while many eligible Minnesota homeowners have not applied for a property-tax refund in the past, the new program reaches out to them to ensure they are receiving the property-tax relief they deserve.
The homestead credit refund will directly benefit St. Louis County property taxpayers. Under our new law, 16,800 homeowners will receive a property-tax refund. That’s a 68 percent increase in the number of homeowners who will receive the refund. Not only that, the vast majority of homeowners who previously received a refund will see an increase in their refund check. The average refund in St. Louis County will be $853.
We also reversed tax hikes to Minnesota renters, enhancing the renter’s credit to provide tax relief to renters, many of whom are students, seniors or disabled. Because of this, 66,000 filers will see a bigger refund and 10,000 additional renters will qualify. The average renter will see a refund increase of $179. In St. Louis County, 14,350 renters will receive an average renters’ credit of $666 next year.
Along with neglecting to mention the direct property-tax relief we passed this past session, the News Tribune too readily dismissed the importance of local government aid in holding down property taxes, at least in several areas. The editorial mentioned that the Duluth city budget may increase by 2.6 percent next year, but it left out a key fact: The property tax levy was held flat. How could this be? The city of Duluth is holding its property tax levy flat in large part because the state provided an additional $1.5 million in local government aid to the city of Duluth this past session. And not only did the Legislature provide that increase, we reformed the system to make local government aid funding more need-based and consistent.
The fact is, without any local government aid or county program aid increase or reforms this session, property taxes would have unquestionably increased. According to nonpartisan House Research, if we had continued down the path of eroding the state and local partnership and kept local government aid flat, property-tax levies would be $60 million higher this year.
As the editorial also mentioned, levies are still preliminary, and some communities are doing a better job than others of putting local government aid increases toward property-tax relief. That is why the Legislature will be watching closely how final property-tax levies shake out over the coming weeks and months.
Given the significant
property-tax relief the Legislature passed this session we are hopeful many communities will use those tools to do a better job of holding down property taxes. In the coming years, we will focus on those investments that are the most successful in reducing property-tax burdens on middle-class families.
We know there is always more that can be done, but the fact remains that after more than a decade of increasing pressure on middle-class families due to rising property taxes, Gov. Mark Dayton and DFLers in the Legislature put a stop to that trend and provided real relief to Minnesota homeowners.
And that’s progress.
Rep. Jim Davnie, DFL-Minneapolis, is House chairman of the Property and Local Tax Division.