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State Representative Paul Thissen
100 Rev. Dr. Martin Luther King Jr. Blvd.
651-296-5375
For more information contact: Chris Shields 651-296-8873
NEWS COLUMN
GETTING PROPERTY TAX RELIEF TO THOSE WHO NEED IT MOST
Rising property taxes – and the best way the State can provide relief to homeowners – has been a hot topic of discussion in the Minnesota legislature this year. According to estimates, property taxes increase about 10% in the last year. The State currently has $307 million sitting in a “property tax relief account."
We cannot expect property taxes to stay flat. Property values increase; government services cost more money. But particularly for those on fixed incomes, a large annual property tax increase is hard to swallow and may mean the difference between keeping one’s home or moving on.
A variety of property tax relief proposals have been offered this session. Some want the State to send a one-time rebate check equal to about 10% of total property taxes to every homeowner and farmer this fall regardless of whether their property taxes increased. Others want to restore more of the recent cuts to local government aid to allow cities to fund police, fire and other local services without raising property taxes even further.
There is another alternative that I hope captures the attention of the legislature. It will be heard before the House Property Tax Division on Monday.
Minnesota currently offers a tax refund to homeowners whose property taxes increase by more than 12% in a year. The refund equals 60% of the property tax increase over 12 percent. The property tax refund program is terrific because it provides direct relief to taxpayers in a way that targets the relief to those homeowners who experienced an exceptionally large increase in property taxes.
But there is a rub. Many people do not know they are entitled to relief and applying for the refund requires a homeowner to prepare and submit even more tax paperwork that is already required in Minnesota. As a result, only 20% of homeowners who qualify for the refund actually apply for the relief. That means nearly $30 million in property tax relief – relief for those homeowners seeing the greatest increases in taxes – is left sitting in the state’s coffers.
The legislation before the House Committee on Monday will require counties to automatically credit the state property tax refund to the homeowner when property tax statements are sent out. County computers can easily determine if property taxes on a house increased by 12% and calculate the refund. No more paperwork and outreach efforts will be necessary. And homeowners will see immediate relief on their property tax statement rather than waiting to apply for the refund and receive a check in the mail.
This is a simple solution that gets property tax relief immediately to those families facing the biggest property tax increases in a given year. It is less expensive than the other solutions being offered. It is time to take action.
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