Property Tax Reform
Over the past nine years, Minnesota homeowners have seen a troubling trend in their property tax statements. Under Gov. Pawlenty’s “no new tax policy,” property taxes went up by three billion dollars during the former governor’s two terms. Over the next three years that trend will persist. Continuing on his path, the GOP majorities in the Senate and House passed legislation to increase property taxes by nearly $1 billion over the next three years.
This steady increase is a result of balancing the state’s budget deficits by cutting local government funding for essential services. Over the last nine years, our local government officials have been faced with an extremely difficult challenge–do more with less. In that time they have done what they could to merge services, cut unneeded programs, and protect what is essential to their constituents. I thank them for their services in these hard financial times.
We cannot continue to travel down this road. Our local governments, E-12 schools and colleges have been stretched to their limits. It is time to create a fair system that doesn’t continue to kick the can down the road.
Along with the increase in taxes, we also need to reevaluate the system itself. Minnesota’s property tax system is too complex. In 2011, 37 different classifications of properties exist. Decisions made by the state, counties, cities, townships and school districts can all affect a property tax bill. In addition, the market value of a property can go down while its tax bill goes up. This makes no sense.
In order to confront the complexities of our system, a Property Tax Working Group was created to examine the entire property tax system and suggest ways to simplify it. The working group, which consists of both elected officials and citizens, must make its recommendations by February 1, 2013. Their specific goals are:
1. to investigate ways to simplify the property tax system and make advisory recommendations on ways to make the system more understandable;
2. to reexamine the property tax calendar to determine what changes could be made to shorten the two-year cycle from assessment through property tax collection; and
3. to determine the cost versus the benefits of the various property tax components, including property classifications, credits, aids, exclusions, exemptions and abatements, and to suggest ways to achieve some of the goals in simpler and more cost-efficient ways.
For more information on the working group, visit the Minnesota Department of Revenue’s website (http://taxes.state.mn.us) and search for “Property Tax Working Group.” The site offers background information, studies and reports, and presentations from the working group’s meetings.
As always, please contact me with questions or suggestions about any issue. Please visit my Senate website at senate.mn/senatorwiger. I also encourage you to visit me at the Capitol, or let me know if you’d like me to stop by your home or apartment. Also, please tune in to my local cable TV show, “Your Capitol: What’s Up?,” which appears on public access channels 15 and 16.