DFLers Propose

Permanent Property Tax Relief
 

Plan provides 12% rebate capped at $130 with a $500,000 market value phase-out, plus permanently restores LGA cuts and provides $56 million for school levy buybacks

Click to see Almanac at the Capitol video of press conference

May 10, 2006

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SAINT PAUL - With property tax day looming, DFL State Auditor candidate and former State Representative Rebecca Otto teamed up with State Representative Joe Atkins (DFL - Inver Grove Heights) to offer some good news: a fair property tax relief plan that would mail rebate checks to the homeowners who need it most this summer while providing for ongoing permanent property tax relief in the form of LGA restoration and school levy buybacks.

Otto says property tax increases across Minnesota will total $2.1 billion in the coming budget cycle under the so-called "no-new-taxes" policies of State Auditor Patricia Anderson and Governor Tim Pawlenty. Holding up a no-new-taxes pledge in one hand and a property tax statement in the other, Otto said "This piece of paper has caused a lot of increases in the numbers on this piece of paper."

Atkins credited Otto with helping develop the proposal, known as House File 4194 and Senate File 3795. "In addition to rebate checks sent to Minnesotans who need it the most this year to provide immediate property tax relief, our proposal would also fund permanent tax relief for years to come," Atkins said.

Otto explained that as a State Auditor candidate, she is "deeply concerned" about the state's property tax problem, which affects the financial health of local communities. She said she approached Atkins early in the session about working together to develop a permanent solution. "I'm working to stop the tax gimmicks the Governor and State Auditor have championed under their supposed no-new-taxes pledge. We need to get our property taxes back in line, and get back to long term solutions."

Atkins said their plan provides 12% property tax rebates to Minnesotans this fall using the $160 million generated by closing Foreign Operating Corporation (FOC) loopholes, which former Revenue Commissioner John James has said are being misused. "Most corporations are honest, but some of them have, frankly, abused a loophole in the way the law was originally written, and this just closes that loophole without changing the law, and levels the playing field for everybody," said Atkins, "while permanently lowering taxes on average Minnesotans."

Future revenues from closing the loophole will be applied to permanent property tax relief, such as restoring 100% of unmet needs for Local Government Aid and buying back $56 million annually in school district levy increases, Otto said.

"Minnesota taxpayers and small business owners want fair taxation, not more shifts and gimmicks that just push state costs down onto our communities," Otto explained. “This is real, permanent relief for our communities.”

Unlike the House Republican property tax refund plan that proposed a one-time 10% rebate, the Atkins-Otto plan does not depend on the state winning the cigarette tax court case. In addition, the bill provides relief to those who need it, rather than focusing on sending huge rebates to the owners of multi-million dollar mansions.

"The Republican plan would send the largest rebates to the mansion owners," Atkins said. "In one case, they want the state to send a $7,000 rebate check to the owner of a $12 million mansion on Lake Minnetonka. We'd rather provide permanent relief to the middle class Minnesota family who has gotten slammed by huge property tax increases."

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