Market Value Homestead Credit 2011 Elimination
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Transcript of Market Value Homestead Credit 2011 Elimination
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8/3/2019 Market Value Homestead Credit 2011 Elimination
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Minnesota Senate
Minnesota House ofRepresentatives
State Capitol100 Rev. Dr. Martin Luther King Jr. Blvd.St. Paul, Minnesota 55155
Sen. D. Scott [email protected]
Rep. Frank [email protected]
Rep. Marion [email protected]
November 8, 2011
Dear neighbor,
If youre a homeowner paying the second half of your property tax bill this month, pay special
attention to your statement. Many of you should notice a line called the Homestead Credit, a
direct property tax relief program that lowers homeowner property taxes. Any home valued
under about $414,000 automatically receives the credit. The maximum credit is $304 and the
average credit is $202. Ninety-five percent of all homeowners receive this benefit.
Wed like all residents to take notice of this special property tax relief now because next year, the
Homestead Credit no longer will exist. The state budget fix that Republicans insisted on and
voted for during the July special sessionand which the three of us voted againstincluded an
irresponsible decision to eliminate the Homestead Credit, meaning the property tax reduction
you see on this years statements disappear next year.
The Republicans replaced the Homestead Credit with a new scheme that will require cities andcounties to factor a lower percentage of homeowners total market value when applying levies.
This new program provides $0 in property tax relief, eliminating a program that provided $538
million in relief; it only shifts which property tax payers bear the burden expected to be homes
that have increased or maintained their values, residential rental properties and commercial
spaces that are increasing in value.
Probably most upsetting is that unlike the old system, there is no guarantee that this new so-
called Homestead Market Value Exclusion will result in lower property taxes for even one
homeowner because the deduction no longer is applied directly to individual tax bills. Instead,
many homeownersand business owners, commercial property owners, renters and owners ofhighly valued homeswill see an increase in their tax bills next year as cities and counties are
forced to spread their levies across more properties to make up for the artificially lowered tax
base.
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This is nothing but a bait and switch by Republicanstrying to appear as though theyre keeping
property taxes flat, but actually forcing them up by their very action. Its a sneaky way to once
again push the states budget troubles onto property taxpayers. Minneapolis is just one of many
cities proposing a zero percent levy increase for 2012, but the citys hard work at maintaining
costs is for naught because of the Republican legislatures changes. Minneapolis is predicting at
least 35 percent of residential homes in the city will see a city property tax increase of up to five
percent in 2012, even though those homes have not changed homestead status, have not had any
improvements, and fall under the citys 0 percent levy increase.
We are especially dismayed that the tremendous property tax relief delivered from the hard won
reforms on the Citys Police and Fire pension obligations, will be eroded by this action.
Property taxes in cities and counties across the state will be increasing in the same manner even
if local governments dont spend one additional dime next year, but simply maintain the current
level of basic services. Its a simple arithmetic fact: raising the exact same amount from anartificially reduced base, absent the offsetting reimbursement from the state, means property
taxes have to increase. And as is always the case when property taxes go up, some properties
have to carry more of the freight if they have maintained their value better than others in the
same jurisdiction. With a cut to the renters property tax credit of 13%, renters are hit twice.
The three of us stood with our DFL colleagues to oppose this change in the first place. We
fought for long-term solutions that wouldnt shove the states problems onto property tax payers
once again, and were prepared to launch a similar fight in 2012. Democrats have proposed
legislation for 2012 that would reverse this years decision and restore the Homestead Credit.
Minnesota property taxpayers already are on the hook for more than $3 billion of GovernorPawlentys budget problems over the past decade. Theres absolutely no excuse for them to pay
even more.
Yours,
D. Scott Dibble
Senator, District 60
Frank Hornstein
State Representative, District 60B
Marion Greene
State Representative, District 60A