By Loren Solberg, Guest Column

A week ago last Friday, I joined my colleagues in the House to unveil the DFL Caucus budget targets. We delivered on the basics Minnesotans have asked for &8212; improved funding for education, health care for all children, and $535 million in property tax relief, offering a significant decrease in property taxes for every Minnesotan.

To pay for this property tax relief, we will work to collect every dollar of unpaid state taxes (estimates put this somewhere between $100-$200 million a year), and close the tax loopholes from foreign operating corporations. In addition, we are calling for the creation of a 4th tier state income tax bracket. This new tier would affect married couples who earn more than $400 thousand a year, after deductions, and individuals who earn more than $226 thousand, again after deductions. Every penny of revenue generated by this fourth-tier bracket will go directly into property tax relief, benefiting every Minnesotan.

When you consider two reports that were released in the past week by non-partisan state agencies, you will understand this why this approach is reasonable, fair and necessary.

First, the nonpartisan Fiscal Analysis Department projected that in 2008, property taxes will increase by a record 8.9 percent, for a total of $603 million. The news is even worse for our region, where taxes are projected to increase between 9.8 percent to as high as 25 percent in smaller townships. If nothing is done, property taxes will have increased by a total of $2.3 billion just in the last five years.

These tax increases are the direct result of the governor&8217;s cuts to local government aid &8212; which funds critical services such as city infrastructure and services such as police and fire departments, county aid and homestead credit. Local governments across the state worked hard to maintain their communities with less money, but at some point, property tax increases were necessary.

At the same time, state funding for our schools was cut &8212; for the first time ever. This was followed by years of flat funding that didn’t even keep up with inflation. Again, property owners stepped up to the plate, paying more than $614 million in school funding.

Property taxes do not take into consideration a persons ability to pay. They hurt senior citizens and others living on a fixed income, as well as young families just starting out and small businesses.

The second report came out on Tuesday. The Minnesota Department of Revenue&8217;s tax incidence report confirms what most of us already know: The middle class in Minnesota is paying a larger percentage of their income in taxes than either lower or upper income Minnesotans do.

Specifically, by 2009 the richest 1 percent of Minnesotans, those making more than $1 million a year, will pay 8.9 percent of their income in state and local taxes. By contrast, those who make between $34 thousand and $52 thousand will pay 12.5 percent in total state and local taxes.

This is nothing new. For instance, in 2004, Minnesotans who made between $40 and $70 thousand

paid the most in state and local taxes &8212; 12.3 percent. The state average was 11.6 percent, with those making over $700 thousand paying 9.2 percent and those at the very top paying 7.8 percent. I think we can all live with the lower income bracket paying less income tax. But, many eyebrows are raised at the idea that the wealthiest Minnesotans actually pay a smaller rate of income tax than middle-class earners.

So, the question really becomes, who should pay more taxes, our seniors and small business owners, or the top money earners in our state? I believe when Minnesotans consider the options, they will agree that our plan creates more tax fairness, while at the same time offers a benefit to every property owner in the state.

Please feel free to contact me if you have questions or comments on this, or any other issue. I can be reached at 443 State Office Building, 100 Rev. Dr. Martin Luther King Jr. Blvd. Saint Paul, Minnesota 55155, or at (651) 296-2365 or (888) 682-6154, or by email at

rep.loren.Solberg@house.mn.

Rep. Loren Solberg of Grand Rapids represents District 3B. He is presently serving in his 13th term and is the chairman of the House Ways and Means Committee.