Lawmakers: Expect property taxes to rise
ST. PAUL - Minnesotans' property tax bills will continue to rise, probably for two years, after a gubernatorial tax bill veto. "We missed a chance to provide some property tax relief," Rep. Paul Marquart, DFL-Dilworth, said. "It would have been n...
ST. PAUL - Minnesotans' property tax bills will continue to rise, probably for two years, after a gubernatorial tax bill veto.
"We missed a chance to provide some property tax relief," Rep. Paul Marquart, DFL-Dilworth, said. "It would have been nice to at least move in the right direction."
Marquart, the House property tax chairman, said it is doubtful legislators will be able to do anything to cut property taxes next year since the two-year budget was passed and signed into law last month.
"Unless we would have a big surplus of some sort, which I don't envision, we will have to wait," he added.
While Minnesotans wait for relief, their property tax likely will rise $600 million next year, a state Revenue Department report estimated. House fiscal analysts estimate the average property tax increase outside the Twin Cities will be 10.3 percent.
A bill passed by the Democratic-controlled Legislature would have reduced almost all Minnesota homeowners' property taxes. However, it depended upon a higher income tax on rich Minnesotans, prompting Republican Gov. Tim Pawlenty to veto the measure.
After regrouping, lawmakers passed a slimmed down version that would have slowed the increase in property taxes. Pawlenty vetoed that bill Wednesday in a large part because a provision unrelated to the property tax section. Pawlenty had warned DFL leaders he would veto the bill.
The governor said he was concerned that property tax relief in that second bill would not provide geographically balanced help.
"Too much relief would be provided through local government aid programs that benefit only half of the population," he wrote in his veto message.
Those aid programs mostly help rural cities, Minneapolis and St. Paul, leaving out the suburbs.
"More relief should have flowed directly to all homeowners," Pawlenty said.
Pawlenty said the way to hold down local property taxes is to put a limit on how much they can go up.
"By improving state funding to cities, counties and townships, they would not have had to rely as heavily on property tax levies to fund their basic government services -- like police, fire service, and libraries," Sen. Tony Lourey, DFL-Kerrick, said.
House Minority Leader Marty Seifert, R-Marshall, suggested looking into what can be done to cut property taxes before the next legislative session begins F eb. 12.
"There were many solid proposals this session and we should spend the legislative interim reaching a compromise that provides immediate relief to property owners and long-term property tax reform," Seifert said. "The property tax bill should be the first bill we vote on during the 2008 legislative session."
Marquart said new revenue is needed for property tax relief, something he does not think will materialize in 2008.
Some Democrats have called for a special session to deal with taxes. Only Pawlenty can call lawmakers back to St. Paul, and he is not inclined to do that.
"A special session is not necessary," Pawlenty spokesman Brian McClung said. "Gov. Pawlenty wishes that DFL leaders would've listened to his concerns and removed the controversial language putting government on autopilot from the tax bill before it was passed."
An organization representing many cities outside of the Twin Cities sent a memorandum the day after Pawlenty's veto urging city officials to tell legislators and the media "that you are extremely disappointed with the veto and how it will affect your city and its residents." The Coalition of Greater Minnesota Cities' memo told officials to let people know the veto "is a direct assault on greater Minnesota."
Coalition President Dan Ness, Alexandria's mayor, said: "With a single act, he swept away $70 million in property tax relief funding for the Local Government Aid program, money that would have gone a long way towards restoring the $150 million that was cut from the program four years ago."
"When the aid is reduced, local officials can either cut services or increase local property taxes to compensate," added the coalition's John Sundvor.
Some cities may receive more aid because of changes made in the formula that divides up state money, but Sundvor said many will get less aid. For instance, Duluth would get $3 million less in Local Government Aid, Bemidji $428,000, Moorhead $936,000, Red Wing $281,000, Worthington $418,000, Willmar $553,000 and Crookston $524,000.