Property taxes were a frequent topic at the doors last year and for good reason. Last year, property taxes in Willmar alone went up 7.1 percent on average for homeowners. Statewide property taxes went up by $370 million with Greater Minnesota unfairly bearing the brunt of the increases. Of that $370 million increase, 64 percent of it came from Greater Minnesota with rural homeowners paying property taxes eight times higher than metro homeowners and rural businesses paying three times higher than the metro area.
It wasn’t just last year either. Our property taxes have doubled over the last decade, hurting middle-class families, seniors, renters, and businesses. The state now has the highest property tax level in our history.
These property tax increases coincide with two things: cuts to Local Government Aid and more recently, the elimination of the Homestead Credit. When cities and counties had to absorb cuts in state aid they had two terrible choices, raise property taxes or eliminate essential services like police protection and street repair. Then when the previous legislature eliminated the Homestead Credit, 95 percent of homeowners lost a direct tax credit of $202 on average.
It’s clear that we need to tackle this problem and enact property tax relief. So how do we do it?
Governor Dayton’s proposed budget includes $1.4 billion in property tax relief through a $500 property tax rebate, and increases aid to local governments and counties by $120 million.
The second bill introduced by the new House DFL majority creates the Homestead Credit Refund to provide direct property tax relief to middle class Minnesota homeowners and renters. The Homestead Credit refund would expand the existing Homeowner Property Tax Refund that about 360,000 Minnesotans receive every year. It would provide an additional $100 million in property tax relief to Minnesota homeowners.
Along with providing property tax relief to homeowners, the bill would provide property tax relief to renters by increasing the Renter’s Credit. The previous legislature raised taxes on renters who earn $55,000 or less by cutting the Renter’s Credit.
These two proposals are good starting points as we move forward. I will work Governor Dayton and my legislative colleagues on both sides of the aisle to find common-sense solutions and pass property tax relief. By reducing this regressive tax, we can put more money into the pockets of hard-working middle-class Minnesotans, seniors, renters, and businesses, all of which will boost our economy. Property tax relief is long overdue and it’s time to work together to get it done.
Please contact me with any questions, comments, concerns, or ideas on property tax relief or any other legislative topic. I can be reached by phone at 651-296-6206 or by email at rep.mary.sawatzky@house.mn. Please also visit my legislative page and sign up for email updates. Thank you for the honor of serving you in the Minnesota House of Representatives.