MN Notebook: Sides Disagree On Property Tax Future

By Don Davis

Minnesotans may receive lower property tax bills next year or local officials may keep those taxes the same.

It all depends on who you ask, and neither side knows for sure.

Republicans and Democrats continued their fight over taxes Tuesday as Democratic Gov. Mark Dayton announced property taxes are expected to fall 1.5 percent in 2014.

“This is reversing a decade-long trend,” Revenue Commissioner Myron Frans said.

But the projection that taxes will fall $121 million statewide next year is just a best guess, Frans admitted. Since local officials make almost all property tax decisions, the Dayton administration has little say.

Republican leaders Sen. David Hann of Eden Prairie and Rep. Kurt Daudt of Crown said they never have seen property taxes go down, even when the state sends local governments more state aid as happened this year.

“These are local decisions,” Hann said, so state officials have no way of knowing what will happen to property taxes now, months before local budgets are written.

Hann and Daudt also said that all Minnesota taxpayers will pay higher taxes under the Democratic budget, after they cut taxes when they controlled the Legislature.

Neither side could produce facts to back up the predictions.

Dayton brought up himself that his Revenue Department is not always right, citing last year’s projection that allowing electronic pulltabs and bingo in Minnesota bars would bring in plenty of revenue to fund a new Vikings stadium. He found out this year that the revenue was falling fall short of what is needed.

Hann and Daudt avoided commenting when asked about the fact that taxes actually increased when they approved tax cuts two years ago.

Dayton and Frans asked reporters into the governor’s office to tout a new report that they said shows an expected property tax decrease.

They credited Democratic initiatives such as increasing state aid paid to cities, counties and townships. The two said that property taxes have gone up 86 percent since 2002, and next year will be the first time they have decreased in more than 10 years.

Frans said that without the Democratic tax changes, property taxes would go up $180 million next year.

Dayton promised reporters that his staff would forward information about how accurate projections such as he released Tuesday have been over the years. Nothing arrived Tuesday, and a Revenue Department spokesman said such a comparison would take days.

It did not take days for Republicans to discredit the projection. Like Dayton, they compared Tuesday’s report to the stadium funding miscalculation.

“They are from the same source,” Hann said.

Daudt called the governor’s announcement a “gimmick.”

Financial status better

A key financial company has improved Minnesota’s financial ranking.

Moody’s Investors Service upped the status from a “negative” to “stable” outlook, Minnesota Management and Budget reported Tuesday.

“We have turned a corner,” Commissioner Jim Schowalter of Management and Budget said. “This action affirms that the state’s financial management is headed in the right direction.”

Schowalter pointed to a balanced budget and repaying schools money the state has borrowed from them as good signs.

Good state financial rankings can lower interest rates the state pays when it borrows money for construction projects. Those ratings have fallen in recent years.

Dayton leaving state

Gov. Mark Dayton flies out of Minnesota today “regarding a possible economic development opportunity for Minnesota.”

It is the second time in two weeks that he has flown out of state. Last week, he met with top officials of a company looking to expand in Minnesota.

At mid-day Tuesday, Dayton refused to tell reporters specifics about last week’s trip, saying making it public would endanger negotiations. He did not mention that he planned another trip today, but a few hours later his schedule listed the trip.

It was not known if he was revisiting the same company or on a new mission.

Dayton plans to return to the Twin Cities in time to speak late tonight at a Minneapolis gay marriage ceremony.

Commissioner Katie Clark Sieben of the Department of Employment and Economic and a staff member will accompany Dayton today.

Dayton said notes on his daily schedule, without listing specifics, fulfill his promise to tell the public about out-of-state trips.

The governor said that earlier this year he made a trip not listed on his public schedule to Hudson, Wis., to lure Valley Cartage to move its headquarters to Lake Elmo, Minn.

Minnesota offered a $940,000 package of incentives, including tax breaks, to the company. Valley accepted the Minnesota offer.

Dayton said the state has made no incentive offers to the business he visited last week.