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“Truth in taxation” (TnT) is a process which the legislature enacted in 1988 to enhance public participation in Minnesota’s property tax system. The components of TnT are:
public advertisements on budget/levy of certain taxing jurisdictions,
The process was enacted by the 1988 Legislature and was phased in from 1989 to 1993. Full implementation of the process began with taxes payable in 1993, the same year as the repeal of the general property tax levy limitations for counties and cities.
Under the law prior to TnT, the main avenue for taxpayer involvement was on the valuation side of the system. Taxpayers received their market value notice early in the year, and then no further information was sent to the taxpayer until the property tax statement was received the following February or March—almost a whole year later. The legislature felt that TnT would improve local accountability by focusing taxpayers on the relationship between the budget process and property taxes.
The main purposes of TnT were:
Although there are some exceptions (i.e., referendums, court costs, etc.) the local government’s final levy can not be increased above the proposed levy amounts reflected on the TnT notices.
The legislature recently modified the newspaper advertisement (for counties and cities over 2500 population) to require the local governments to include changes in total spending and property tax levy, and to show what the proposed local tax rates would be if there was no levy increase.
The TnT notice helps the taxpayer see whether the property tax changes (increases or decreases) were due to changes in local government spending or due to other factors (i.e., changes in the property’s market value, state aid, class rate changes made by the legislature, etc.)
Another change requires a public hearing (for counties and cities over 500 population) only if its proposed property tax levy increased over its current property tax levy by more than the percentage increase in the current implicit price deflator.
The property tax statement reflects a comparison of the property’s current year’s valuation, state aids/credits and property taxes to the property’s previous year’s valuation, state aid/credits and property taxes. That way a taxpayer can analyze, at a glance, what changes have occurred on the parcel of property. The amount of breakdown within various categories was also expanded to give the taxpayer more information.