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Legislative News and Views - Rep. Glenn Gruenhagen (R)

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Clarifying property tax changes

Thursday, October 13, 2011
To the editor, I would like to clarify some things regarding recent changes to homestead tax credits. The tax bill Gov. Dayton approved in July included a new Homestead Market Exclusion, designed to be an improvement over the unstable Market Value Homestead Credit program. Now the benefit goes directly to the taxpayers and the cost of the former state-paid credit is now shifted relatively evenly among all property taxes, including homesteads. The amount a home will be taxed is reduced on the front end, instead of offsetting a portion of the property taxes you owe on the back end. Both methods provide about an equal amount of property tax relief. Change was necessary because the state was not always fulfilling its obligation to fund the former program. This trend of the state not living up to its promises left local governments unfairly holding the bag. It is important to reiterate we did not eliminate the property-tax relief for homeowners. Furthermore, the system we enacted has been used successfully in other states. The League of Minnesota Cities, the Minnesota Township Association and the Minnesota Inter-County Association all supported this change. Local governments have the ability to control their budgets in these deficit times just as the state did. Only local governments can set property taxes and some local governments have even reduced their tax levies for next year, including Anoka County with a 7-percent reduction. There can be glitches in switching programs, so we expanded the Property Tax Refund program to help ease the transition. The PTR will deliver property tax relief directly into the hands of property taxpayers, offsetting any one-time tax increases stemming from our change to the MVHE. Sincerely, Rep. Glenn Gruenhagen
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