ST. PAUL, MN – The House DFL released details on a $250 million property tax relief package for Minnesotans that includes direct property tax relief to homeowners, renters and modernizes the state's local government aid formula. Up to 1 million Minnesotans will see direct, targeted property tax relief through the proposal.
Property taxes have risen 86% in the last decade and last year the GOP-controlled legislature eliminated the Homestead Credit, causing property taxes to increase $370 million statewide. The House DFL plan will provide direct property tax relief to middle class Minnesotans by providing $157 million for the Homestead Credit Refund.
Under the Homestead Credit Refund:
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More than 300,000 homeowners (75% of filers ) will see a refund increase
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More than 100,000 additional homeowners will be eligible for a refund
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The average homeowner will see their refund increase by $212
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A grand total of 636,000 homeowners will see direct property tax relief
“Property taxes are a big concern for Greater Minnesota families,” said Rep. Dorholt (DFL-St. Cloud). “I know a lot of homeowners were not happy to see the Homestead Credit disappear last year, and providing property tax relief to these homeowners is a main priority.”
In addition to providing middle class homeowners a refund, the DFL proposal includes $15.5 million for the Renter’s Credit. The Renter’s Credit is a refund that provides direct property tax relief to low- and middle-income renters. The previous legislature raised property taxes on renters who earn less than $55,000 a year by cutting the Renter’s Credit and renters saw their property taxes increase by an average of $87. The new proposal enhances the renter’s credit by increasing the maximum refund allowed for renters. 66,000 filers will see a bigger refund and a total of 340,000 renters will see property tax relief through the Renters’ Credit.
“Putting more money in the pockets of middle-class homeowners and renters will boost job creation and economic growth throughout the state,” commented Rep. Dorholt. “After years of squeezing the middle-class, it’s time to put an end to status quo cuts that harm Greater Minnesota, and to instead make investments to strengthen the middle class and grow our economy.”
The DFL is proposing the most significant Local Government Aid (LGA) reform in over a decade, including $60 million for Local Government Aid and $28 million for County Program Aid. The LGA formula is meant to provide cities with state aid when their essential needs exceed the amount that they can raise in property and local taxes. Many Greater Minnesota communities have faced severe LGA cuts in recent years, forcing them to cut back or eliminate vital city services.
“Greater Minnesota has faced serious cuts to local government and county program aid in recent years,” continued Rep. Dorholt. “Property taxes for Greater Minnesotans have increased eight times more than in the metro, and Greater Minnesota business taxes have increased three times more. We cannot expect our communities to thrive when faced with these unpredictable increases.”
The new property tax relief proposal includes an updated LGA formula that is stable, easier to understand, and predictable. The new formula is need-based, and provides the most aid to the communities with the greatest need. Giving cities a more stable source of aid will allow them to better plan financially and to sustain or expand local services such as police, fire and infrastructure.
“Now is the time to provide real, direct property tax relief to homeowners and renters across the state. Implementing a reliable LGA formula will move Greater Minnesota into the future by providing solid financial footing that local governments can count on to sustain essential city services and meet the needs of the community.”
Under the new proposal, St. Cloud will receive an additional $1.23 million in LGA payments.
Rep. Dorholt can be reached by phone at (651) 296-6612 or by email at rep.zachary.dorholt@house.mn.
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