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Legislative News and Views - Rep. Steve Drazkowski (R)

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EASING PERSONAL TAX BURDENS THROUGH PROPERTY TAXPAYER EMPOWERMENT ACT

Thursday, April 9, 2015

"Why do my property taxes continue to rise?"

As chairman of the Minnesota House Property Tax and Local Government Finance Division, this is a question I hear quite often. It's also the main reason I traveled to twelve Minnesota communities to participate in listening sessions where residents shared their property tax concerns.

One of the top complaints I heard was the belief by citizens that their local governments are spending too much money, inevitably leading to higher property tax rates so local officials could have more funds at their disposal.

So how can this concern be addressed?

One school of thought says the State of Minnesota should simply give local governments more state subsidies which would, in theory, eliminate the need to raise anyone's property taxes. This tactic was utilized by an all Democratic-led state government last session, as hundreds of millions were sent to local governments for this purpose.

Their plan failed Minnesotans. According to the Certified 2015 Property Tax Levies analysis released by the Minnesota Department of Revenue, residents are paying $286 million more in additional local property taxes when compared to 2014, which amounts to a 3.4 percent increase.

Another option is levy limits. Most local governments hate this idea because it ties their hands when it comes to future budgeting. Analysis on the effectiveness in holding down government spending is mixed.

This is why I am sponsoring a new choice – the Property Taxpayer Empowerment Act. It gives voters the opportunity to respond to a local government that they believe is being out of touch or fiscally irresponsible with their property tax dollars.

In reality, this legislation makes local officials more accountable to their constituents. Under the plan, if in December it is found that certified property tax rates are higher than they were during the previous year, taxpayers have the right to put the issue of their property tax levy increase on the Election Day ballot that following November.

If the local government convinces the public the property tax increase is justified and the vote is in their favor, nothing changes – the local government’s levy increase decision is sustained. If the voters oppose the property tax increase decision, the local levy is reset to the amount that was utilized by the local government during the previous year.

Giving voters some authority in property tax increase decisions is not a foreign concept. School districts play by these rules constantly.

In fact, one could argue that the Property Taxpayer Empowerment Act is less stringent on city and county government spending decisions than school levy request guidelines. First, the public may view the local government's property tax increase decision as needed and it may never reach the ballot. Second, local leaders could have up to eleven months to convince voters that the revenue is critical for their community. School districts sometimes have less than half that time to make their case to the public.

Only local governments who don't listen to the people should worry about this legislation. Those who are fiscally responsible in the eyes of their residents will have no problems and should continue operating as they have in the past.

No one can question that local property tax rates are established by local government officials. There remain only a few statewide solutions to help citizens ease these tax burdens.

Giving cities and counties more state taxpayer money sure hasn't helped, but I believe the Property Taxpayer Empowerment Act will. Not only does it continue to give local governments the latitude to do what they want with property tax rates, but it finally gives residents an opportunity to have their say and provide a real consequence if they believe their local officials have gone too far.