Two takes on Minnesota property taxes blur picture

Farm Forum

ST. PAUL, Minn. (AP) — New projections about how much Minnesota homeowners, businesses and others will pay in property taxes this year have set off a dispute among Democrats and Republicans.

The Department of Revenue released figures late on Feb. 28, but the feud carried into March 3 and will undoubtedly persist into the fall campaign.

Democrats insist they’ve reversed a tide of ever-rising property taxes. Republicans say it’s sleight of hand, and they point to the overall amount that will be collected.

There is truth to arguments both sides are using, but plenty of context is being left out as they angle for advantage.

Here are some questions and answers that might help sort through the spin:

Q: How do the 2014 property tax levies set by cities, counties, townships, school districts and other taxing authorities compare to 2013?

A: Local governments assess the bulk of property taxes in Minnesota. They’re due to collect more than $8.6 billion this year. That’s up about $125 million from last year.

Q: Does that mean promises of property tax help were broken?

A: Lawmakers also put lots of new money into property tax refund and credit programs that, overall, cancel out the increase. Projections show $133 million in such awards, which are based on income and vary in size. People have until August to apply for the refunds, so it’s still too early to say if things will be better or worse in the final analysis.

Q: What is at stake politically?

A: Democrats, who control the Legislature and governor’s office, pledged to attack property taxes. They raised taxes on the wealthy and other select groups to steer more money to local governments and property tax relief programs. Gov. Mark Dayton and Democratic legislative leaders in July promised a steep property tax drop for the following year that didn’t materialize, but they want to be able to tell voters taxes are down, however marginally. Republicans hope to convince voters that the Democratic recipe didn’t work at all and they deserve the chance to lead.

Q: What has happened with property taxes in the recent past?

A: Even after factoring in the refunds, property taxes have been going up for years. The total change, including refunds, has been as high as $375 million in 2009 to as small as $92 million in 2011. If the Department of Revenue’s estimate holds this time, there will be an $8 million drop in 2014, practically a rounding error given the huge amount involved.

Q: So is my own bill going up or down this year?

A: That depends on where you live, what has happened with your home value and whether your local leaders increased the levy. According to state data, levies are up in 58 counties and are flat or falling in the remaining 29. There are 470 cities that imposed at least some levy increase while 378 have no change or are cutting their levies. But residential property tax assessments have fallen by $47 million, or 1.3 percent, statewide.

Q: Are there other factors at play?

A: Yes. Soaring agricultural land values are a big component because it’s meant more property taxes owed on that land. Also, the improving economy means lots of new homes are being built and businesses are expanding their footprints. Of the extra collections expected in 2014, a whopping $81 million is attributable to new construction, according to nonpartisan House researchers.