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State Representative Rick Hansen
100 Rev. Dr. Martin Luther King Jr. Blvd.
651-296-6828
For more information contact: Matt Swenson 651-297-8406
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HANSEN VOTES TO CUT PROPERTY TAXES
ST. PAUL – Since 2002, property taxes in Minnesota have skyrocketed almost $2.3 billion – with most of that burden falling squarely on the shoulders of middle- and low-income earners. A bill (HF 1222) passed yesterday in the Minnesota House of Representatives would change that by providing property tax relief to those Minnesotans who need it most. State Representative Rick Hansen (DFL – South St. Paul) voted for the bill in his ongoing efforts to provide significant and permanent property tax relief and tax fairness for all Minnesotans. The initiative was part of a larger tax bill (HF 3149) that passed by a vote of 80 to 52 last night.
"Steadily rising property taxes are putting the squeeze on senior citizens, young families, small businesses, and middle-class Minnesotans in every corner of the state," said Rep. Hansen. "Our tax system in Minnesota is becoming increasingly regressive, and this bill will do something about it."
The House tax bill simplifies the property tax system by phasing out the homestead market value credit, repealing the property tax refund for homeowners, and eliminating the state income tax deduction for property taxes. It replaces all three programs with one fair and efficient Homestead Credit State Refund based on income and property value. Without raising taxes, the property tax reform bill would:
§ Target homeowners who need property tax relief the most (seniors, families, farmers, etc.);
§ Base property taxes on one's income and ability to pay;
§ Protect home ownership and stabilize neighborhoods during times of economic hardship and escalating home market values;
§ Provide stable and permanent property tax relief; and
§ Create a fairer, and more progressive tax system in Minnesota.
If nothing is done to correct the problem of skyrocketing property taxes, Minnesotans are expected to bear the burden of another $559 million increase in the coming year, bringing the total over six years to over $2.7 billion. Much of that burden would fall squarely on the shoulders of middle-class Minnesotans already struggling through difficult economic times.
"Last year's tax incidence study showed that middle-and low-income Minnesotans are paying a higher portion of their income for state and local taxes than the state's highest earners," said Hansen. "This regressive tax system is irresponsible and wrong. Minnesotans deserve a tax system that treats everyone fairly, and provides necessary relief for those who need it the most. This bill does that."
The bill would directly benefit Dakota County with $1.9 million in increased Local Government Aid (LGA) in 2009. Cities in Hansen's legislative district stand to gain an additional $549,000 in LGA from the state.
"The rising cost of law enforcement combined with a lack of additional resources has left cities in our area with fewer resources to effectively fund their police forces," said Rep. Hansen. "By passing this bill, we can give these cities the resources necessary to provide their citizens the ideal level of comfort and safety they deserve."
There are significant differences between House and Senate tax proposals, and Governor Pawlenty has voiced criticism about this plan. HF 3149 will now head to conference committee where members of the House and Senate will work to craft a compromise bill before it is re-passed and sent to Governor Pawlenty for final approval.
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