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St. Paul, MN - State Representative Patti Fritz (DFL - Faribault) supported an amendment on the House floor on Tuesday that would have brought an additional $175,000 in Local Government Aid (LGA) to the city of Faribault in 2007 and offered the Faribault School District a levy savings of almost $277,000.
The amendment was offered by Rep. Paul Marquardt (DFL-Dilworth) to a bill proposing a one-time property tax rebate check. Marquardt's plan used the same amount of money as the rebate plan, but instead of offering rebate checks that heavily favor the metro area, his plan spread the money out statewide and included a wider range of recipients.
The rebate check, which is based on property taxes paid, does not include renters (who pay their share of higher property taxes through their rent), agricultural and commercial-industrial property owners. Marquardt's amendment would distribute funds to all of these property tax payers.
According to Fritz, since 2003, LGA has been cut by $523 million in the state, $623 million with inflation factored in. In addition, county aid was cut by $220 million ($40 million more with inflation) and school districts statewide received their first funding-cut ever, followed by years of flat funding. These funding cuts resulted in an increase in statewide property taxes of $1.5 billion - $2.22 billion with inflation.
"No wonder the average family is struggling to keep up," said Fritz. "Someone has to pay for all of these cuts-and the property owners have stepped up and supported their towns, counties and schools."
Besides failing to address the rise in property taxes, Fritz said the rebate plan had additional problems.
"We don't even know if the cigarette fee money is available," said Fritz. "If the State Supreme Court upholds the current ruling, instead of cashing a check, will be facing another hole in the budget."
Fritz said the rebate check also takes another stab at Greater Minnesota. Despite the fact that the most significant cuts in LGA were made in rural Minnesota, 68.7% of the property tax rebate money will go to the metro area. For example, the average homeowner in SW Hennepin County will receive a $400 rebate, while the average homeowner in the Faribault area will get $114.
"Rural Minnesota suffered the pain of the LGA cuts and yet the relief goes to the wealthy suburbs," said Fritz.
In the end, supporters of the amendment did not even get to vote on it –it was ruled as not germane to the bill. The rebate check plan was voted on, and Fritz voted in favor of it.
"I know that if these checks actually do arrive, they will be happily received," said Fritz. "However, I think a more fair and long-term reduction of property taxes would be even more welcomed."