Minnesotans whose taxes are soaring would get a larger property tax refund under a bill House Republicans will push in next year’s legislative session.
“This is a top-tier priority for our caucus,” Chairman Greg Davids, R-Preston, of the House Taxes Committee said Monday in announcing his bill to increase property tax refunds for homeowners whose property tax bills soar.
The Davids plan also would cut $411.85 from every business property tax bill.
Democrats question the timing of the $80 million proposal since it came days before Minnesotans begin to receive their “truth in taxation” notices that in many cases will show large property tax increases from local governments that tried to make up for a $260 million cut in state payments to them earlier this year.
To the top House Democrat on property tax issues, the news conference was “a preemptive strike” before Minnesotans are shocked by their tax increases. Rep. Paul Marquart, DFL-Dilworth, that Republicans missed their chance to reduce property taxes earlier this year, but with changes they made taxes actually are rising.
Davids would not say how the Legislature would fund the $80 million program other than cutting spending. Finding those cuts could be difficult, especially given that Davids said he understands the state budget could face a up to a $750 million deficit when a new fiscal report is issued Dec. 1.
To a reporter’s question, Davids admitted that some policymakers could say his bill is rewarding local governments that raise property taxes. “You could make that argument.” But, he added, “every situation is going to be different.”
Republicans, including Davids, say local officials did not need to raise taxes to make up for the $260 million loss that followed the Republican-controlled Legislature and Democratic Gov. Mark Dayton eliminating the Market Value Credit program this summer. Some local officials said they would raise property taxes by the amount the state cut, and blame state officials.
The issue about whether Republicans forced a tax increase no doubt will be heard often before the election less than a year from now.
Davids’ plan would provide larger refunds to homeowners whose taxes are rising and give refunds to some who now do not receive them.
Marquart said the Davids plan will not help many in rural Minnesota because their home values may be too low to be part of the refund program. “That is really going to hit rural Minnesotans big time.”
Rural property taxes — mostly levied by schools, cities and counties — are rising at three times the rate they are in the Twin Cities, Marquart said, because of the elimination of the Market Value Credit program.
Marquart and other Democrats have proposed restoring the Market Value Credit program, but the western Minnesota legislator admitted that has little chance given Davids’ strong support of the elimination on Monday.
The president of the Coalition of Greater Minnesota Cities said David’s plan is not enough.
“The legislature cut over $600 million of property tax relief in the summer of 2011 and today offered to fix it with $80 million,” Worthington Mayor Alan Oberloh said after David’s Monday announcement.
Besides the Market Value Credit change, city officials count reductions of other state payments as hurting property tax relief.