By Rep. Paul Anderson
Some may wonder about the impact of decisions made in St. Paul by the Legislature. Do they really make any difference and do they affect me personally?
I couldn’t help but think of that when we heard a report last week in the Property Tax Division about tax collections in Minnesota. Two items jumped out at me. One had to do with the $100,000 exclusion in the statewide business property tax for commercial properties all across the state. The other dealt with the 40-percent state credit granted to residents who are paying school capital referendum levies as part of their property tax statement.
The percentage DECREASE in net tax collected from the lower tier of commercial/industrial property was a large 17.9. Over $52.5 million less will be collected in 2018 than was collected the year before. That’s a very significant reduction in taxes! One local businessperson offered a quick “thanks” after finding out his statewide business tax was going down this year. And for those whose commercial building value is less than $100,000, the entire state tax has been eliminated.
For the higher valued commercial property, where the $100,000 exclusion was still provided but represented a smaller percentage of the property’s value, the figures show a 4.2 percent increase in net tax.
As for the effect of the 40 percent tax credit on school levies, the net reduction in statewide taxes to be paid in 2018 on agriculture homestead land was 8.4 percent. That works out to a nearly $26.5 million reduction in taxes that farmland owners will be paying. For non-homestead ag land, the reduction is 3.4 percent or just over $12 million in net taxes to be paid this year.
When folks wonder where last year’s surplus went, this is part of the answer. Fewer taxes collected means less revenue taken in. So, whether it’s a credit paid by the state or an actual decrease in the amount of taxes paid, those amounts must be accounted for by using surplus funds to make up the difference.
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As this is written, the sun is shining. However, the forecast is not calling for a balmy Easter. Don’t think there’ll be much early yard or field work done any time soon. And those who like to plant potatoes on Good Friday probably had to dig through frost to get the job done!
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