GOP budget raises property taxes on middle class by $1 billion
Senate Republicans passed an omnibus tax bill on May 18 which relies on more than $1 billion in property tax increases on middle class Minnesotans. The omnibus tax bill makes deep cuts to local government aid, eliminates the Market Value Homestead credit, and reduces the renters’ property tax refund for more than 300,000 Minnesotans.
“This bill offers a clear contrast between raising taxes on Minnesota homeowners and businesses or Governor Dayton’s balanced proposal which makes budget cuts but only increases taxes on the wealthiest 2 percent of Minnesotans,” said Sen. Tomassoni. “The choice is clear between asking the very wealthiest Minnesotans to pay their fair share through a slight income tax increase or increase property taxes on middle class families, seniors and renters. It is unfortunate that Republicans are choosing to protect the wealthiest Minnesotans at the expense of Minnesota businesses and families across the state.”
The final Republican tax proposal includes more LGA cuts than were included in the initial Senate proposal. Sen. Tomassoni said this is one of the reasons local chambers of commerce across the state have come out in favor of a balanced budget that includes state revenue in order to lessen huge property tax increases.
“We’ve seen the Pawlenty no new taxes pledge translate into huge property tax increases for everyone,” Tomassoni said. “Property tax increases are a killer for small businesses and homeowners, especially in greater Minnesota and that’s why the Governor and the DFL are working towards a balanced solution.”
According to non-partisan analysis, the GOP proposal would result in more than $1 billion in property tax increases. In addition, the reduction in the renters’ credit will lower the refund for more than 300,000 Minnesotans, 85,000 of which are seniors or disabled Minnesotans. The elimination of the homestead market credit would be particularly hard on middle class homeowners.
“Taking away the homestead credit is a direct tax increase on homeowners,” Sen. Tomassoni said. “I support Gov. Dayton’s compromise budget solution which holds down property taxes by reducing spending by $1.8 billion while raising $1.8 billion in revenue through an income tax increase on the top 2 percent of wage earners. In contrast, Republicans have not moved one inch towards compromise since the first day of session.”