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State Representative Joyce Peppin
100 Rev. Dr. Martin Luther King Jr. Blvd.
651-296-7806
For more information contact: Austin Bleess 651-296-5529
NEWS COLUMN
HOW DO YOU SPELL TAX RELIEF?
By Joyce Peppin
State Representative, District 32A
First, the bad news: your state and federal income taxes are due April 17. The good news? Because of rising property taxes, more and more Minnesota homeowners may be eligible for a special targeted property tax refund from the state, and married couples could see some income tax relief as well.
Even though this is a non-budget session at the State Capitol, there is support for using a portion of the recent $88 million budget surplus for tax reductions. Foremost, there’s broad support to end the “marriage penalty” in the state income tax system. That legislation would allow couples the full standard deduction for joint filers that they claim on federal forms. It has been estimated that the legislation could save 500,000 Minnesotans some $95 million over two years.
While lawmakers in the House prefer to use existing surplus dollars to end the marriage penalty, a Senate tax panel has advocated raising other income taxes to pay for it. This may be an issue that comes down to the final day of the legislative session on May 22.
At the same time, there is legislation pending to provide property tax relief spurred by last year’s double-digit property tax hikes. But there is no clear consensus on how to deliver that relief. Some want to increase aid to schools and local units of government that increased taxes because of lost state aid. Governor Pawlenty wants the legislature to impose levy limits on local governments to prevent them from increasing property taxes above a certain amount.
Remember, the state spends millions each year to keep your property taxes low. Look at your 2006 property tax statement that you should have received recently. Line 1 shows your tax liability, but go down to Line 3 and look at the tax you would actually pay on your home if not for state aids and credits. In one example offered by a staff member who lives in St. Paul, fully 70 percent of the property tax on his home was reduced by state aid and credits.
In addition, the state provides homeowners property tax refunds (those familiar yellow booklets). Many are eligible for a regular property tax refund if total household income is less than $85,210. There’s also a separate targeted refund program for homeowners (with no income limit) whose net property taxes have increased more than 12 percent.
In this non-budget session, providing tax relief is competing with spending demands from education to health care for a limited pot of money. Eliminating the marriage penalty should be our priority.
Rep. Peppin represents District 32A, which includes the communities of Corcoran, Dayton, Greenfield, Hanover, Rogers, Hassan Township, and southwestern Maple Grove. Peppin invites anyone to share their questions or comments about state government with her. She may be reached by email at rep.joyce.peppin@house.mn; by phone at (651) 296-7806; or by U.S. Mail at 411 State Office Building, St. Paul, MN 55155.
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