Property tax relief is front and center at Capitol
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State officials recently estimated that property taxes will increase an average of 8.2 percent this year. That compares to last year's jump of 9.2 percent. Property owners throughout Minnesota are feeling the pinch. Many grumble to themselves. Some vent their frustration in public.
Dozens of homeowners aired their grievances in December in St. Paul during a truth in taxation hearing.
Nancy Eiserman of Little Canada told local government officials that the taxable market value of her house is too high, and so is her property tax bill.
"Personally, we can't take it," Eiserman said. "I feel like you guys are stabbing us in the heart. I said to my husband, five years from now we're not going to be able to live here. We are not going to be able to afford the property taxes."
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City, county and school district officials blame the state for rising local tax levies. They say recent reductions in state aid, as well as unfunded mandates, have forced them to turn to property owners for needed revenue.
At the state Capitol, Gov. Tim Pawlenty says he's ready to work with House and Senate DFL leaders to try to improve the situation.
"There's lots of different ways you can get property tax relief to Minnesotans," Pawlenty said. "I think at this point I'd just say that's a goal we all share for the session."
The Republican governor has not yet said what kind of tax relief he'll include in his budget proposal. During his re-election campaign, Pawlenty talked about a cap on property taxes.
Democrats are looking at other options, including an increase in the state payments to cities known as Local Government Aid, new funding for counties and additional money for existing tax refund programs that target low income homeowners.
"I just think it's unacceptable for property taxes to be going up in that 8 percent to 10 percent range when inflation is running at about 3," said Sen. Tom Bakk, DFL-Cook.
Bakk, the new chairman of the Senate Taxes Committee, says property owners across the state are particularly frustrated by the rising cost of public schools. Bakk says the state needs to cover a greater share of voter-approved school levies.
"Depending on the tax capacity of a school district, the state pays a certain percentage of the excess levy," Bakk explained. "We could go take a look at that formula, make some adjustments to it so the state would pick up a larger share if it's passed."
The new DFL majority in the Minnesota House is taking a similar approach. Rep. Paul Marquart, DFL-Dilworth, will lead a new property tax relief subcommittee. He also wants a broad solution that includes changes to school funding, increased aid to cities and counties and beefed-up refund programs.
"Any type of a plan needs to have all of those things put together so it's fair mix, an equal mix, so that every area of the state receives significant property tax relief," Marquart said.
House and Senate leaders are expected to also spend some time discussing tax-rebate checks. The projected state budget surplus requires Gov. Pawlenty to come up with a plan for sending part of the excess revenue back to taxpayers.
But the discussion could be largely a formality. Pawlenty and legislative leaders say they favor changes that provide ongoing property tax relief over a one-time payment to Minnesotans. They haven't yet explained how much permanent relief would cost or where the money would come from.
