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Minnesota House of Representatives

State Representative Michael Paymar

563 State Office BuildingState Office Building
100 Rev. Dr. Martin Luther King Jr. Blvd.
651-296-4199

For more information contact: Chris Shields 651-296-8873

Posted: 2006-04-07 00:00:00
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NEWS COLUMN

GIVE MINNESOTANS A BREAK ON PROPERTY TAXES

There is a tough reality setting in across Minnesota; property taxes are expected to rise at an alarming rate. Recent estimates based on a maximum levy increase show that average property taxes in St. Paul could go up as much as 19.8 %. The major reason behind the tax increases was the decision by the Governor and Legislature to pass along additional financial burdens onto local governments and school districts. As a result, services traditionally covered by the state are being paid through property taxes. Additionally, the Governor would only agree to increased investments in K-12 education if some of those increases were tied to raising local levies. Relying on property taxes to fill wide holes left by the state is regressive and painful for working Minnesotans.

There are ways to make the property tax system fairer. We've already had success in keeping market value increases under control with Limited Market Value (LMV) a rule which limits market value increases to no more than 15% for tax purposes. LMV was to be phased out gradually by 2008. Last session, I authored a bill and worked with legislators from both parties to delay the phase out arguing that ending LMV would be particularly devastating to people in neighborhoods like Highland Park and Macalester-Groveland.

Until the Governor and the Legislature get serious about actually reforming the property tax system there are ways to reduce your property tax increases. You may qualify for a Targeted Property Tax Refund if you are a homeowner and the net property tax on your homestead increased by more than 12% and at least $100 from 2005 to 2006, as long as the increase was not due to improvements to your home. This refund does not depend on your income. You may also qualify for the Homeowner and Property Tax Refund, if you have a household income of up to $87,780 or are a renter and have an income up to $47,350. Your refund will depend on how high your rent or property taxes are relative to your income. The maximum refund for homeowners is $1,640 and the maximum refund for renters is $1,350. If you (and your spouse if married) are 65 or older and have lived in the same home for 15 years or more, you may also be eligible for the Senior Citizens Property Tax Deferral Program a way to defer portions of your homestead property taxes. Please contact me at 651-296-4199 or the Department of Revenue at 651-296-3781 or at dorweb.comm@state.mn.us for additional information on property tax refunds.

The State has a history of tinkering with our property tax system and has provided various forms of relief. But, I would like to see real property tax reform in this antiquated system. The State should fulfill its obligation to totally fund K-12 education. Another reform (legislation already introduced) would repeal existing property tax refunds (PTR) and creates a new PTR that would place a limit of 4% to the percentage of a taxpayer’s household income that can be taken by the property tax. The new PTR would be available to all households regardless of income.

It is time to evaluate the way we pay for government services. Middle-income families are forced to should more of the burden. Balancing budgets based with increased property taxes and fees is harmful to Minnesotans and not a long-term solution.

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