GOP says bye-bye to homestead creditPublished 9:02am Friday, March 30, 2012
Column: Paul Marquart, Guest Column
Tough luck. That’s the message that Minnesota Republicans sent to homeowners in Greater Minnesota last week when they passed a tax bill that didn’t address the property tax increases they caused last session.
To understand why their bill was particularly troubling for Greater Minnesota it is helpful to review what happened last year. The budget the Republicans passed to end the state shutdown completely eliminated the homestead credit, a tax benefit that homeowners had cherished and valued for over four decades. This raised property taxes on homeowners, farmers and small businesses.
If you are curious what the elimination of the homestead credit meant to you, I encourage you to take out your 2011 property tax statement and compare it your 2012 statement, which should be coming soon in the mail. You will notice that on line 4A from your 2011 property tax statement the word “homestead” has vanished from your 2012 statement — along with your tax relief.
The permanent elimination of the homestead credit led to $370 million in property tax increases in 2012. The state now has the highest property tax level in our 154-year history. Over the last 10 years property taxes for homeowners have now increased by 92 percent. For farmers, property taxes have increased 150 percent. And Greater Minnesota was disproportionately harmed. Of the property tax increases last year, 64 percent of them came from Greater Minnesota. Rural Minnesota is hit with three times the property tax increases as the metro area. Rural homeowners’ property taxes rise eight times higher than metro homeowners — that’s right — eight times higher and rural businesses saw their taxes rise three times higher than in the metro area.
Enough is enough! We had an opportunity to right this wrong last week, but instead of helping our homeowners, farmers and senior citizens by restoring the homestead credit the GOP majority doubled down on tax policies that raise taxes on Minnesotans in order to cut taxes for big businesses. The property tax relief in their tax bill is 99 percent for large corporations and businesses, less than 1 percent for homeowners, and farmers get completely left out in the cold. This despite the fact that taxes on farmland went up by double-digits last year due to the elimination of the homestead credit.
Perhaps worse, the tax cuts for businesses in this tax bill were paid for by tax increases for Minnesota renters who earn $55,000 per year or less. This will increase taxes by an average of $213 on over 300,000 Minnesotans, including 86,900 who are seniors or disabled renters, many who live on fixed incomes and struggle to make ends meet. In Freeborn County, more than 700 senior and disabled renters will see a tax increase to pay for these tax cuts for corporations.
We owe thanks to the businesses in our community that help keep our town and cities prosperous. But I would bet most of our businesses wouldn’t want a tax cut if they knew it was coming directly from the pockets of the seniors, families and hard-working Minnesotans that shop at their restaurants, purchase their products and utilize their services.
We can do better than this. We should restore the homestead credit to provide tax relief to homeowners, farmers and our small businesses. It’s fairer and a better approach to grow jobs and strengthen our communities.
Rep. Paul Marquart is the former House Property Tax Division chairman and the current DFL Party lead.