Saint Paul, Minnesota – Yesterday, 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 one million Minnesotans will see direct property tax relief through the proposal.
Property taxes have risen 86 percent in the last decade and the previous 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:
· More than 300,000 homeowners (75 percent of filers) will see a refund increase
· More than 100,000 additional homeowners will be eligible for a refund
· The average homeowner will see their refund increase by $212
· A grand total of 636,000 homeowners will see direct property tax relief
“Property taxes are a huge concern for so many families and businesses in Greater Minnesota,” said Rep. Sawatzky. “Property taxes for Greater Minnesotans have increased eight times more than in the metro, and Greater Minnesota business taxes have increased three times more. That is unacceptable and we need to enact middle-class property tax relief this session. Putting more money in the pockets of our homeowners and renters will boost economic growth throughout the state.”
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.
The DFL is also 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.
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.
Willmar would see a 7 percent increase in LGA, Kandiyohi a 13 percent increase, Spicer a 19 percent increase, New London a 9 percent increase, and Atwater a 16 percent increase.
“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,” said Rep. Sawatzky. “After a decade of cuts to local governments and squeezing the middle class, this property tax relief package will strengthen the middle-class, grow our economy, and help our cities and counties provide the essential services that Minnesotans expect. I will work with my colleagues in the coming weeks to make this a reality.”
Rep. Sawatzky encourages constituents to contact her with any questions, comments, concerns, or ideas on any legislative topic. Rep. Sawatzky can be reached by phone at 651-296-6206 or by email at rep.mary.sawatzky@house.mn. Constituents can also visit Rep. Sawatzky’s AreaVoices blog, legislative page and sign up for email updates.