Property tax may be a little less
ST. PAUL -- Almost 1 million Minnesotans would receive larger property tax refunds, or their first refunds, under a House Democratic proposal.
Rep. Jim Davnie, DFL-Minneapolis, said the House plan would establish the homestead credit refund, spending $250 million to replace existing homeowner tax refunds and expand a renters' refund. More than 300,000 homeowners would get bigger refunds; that is 75 percent of those who file for refunds.
Davnie said the average homeowner's refund would rise $212.
Also, 100,000 more homeowners would be eligible for a refund, and the state would attempt to convince more to apply.
The average renter would get $179 more a year. Property tax relief would be made available to 340,000 renters.
"Providing comprehensive property tax relief will put more money in the pockets of middle-class Minnesotans and help move our state forward on more sustainable and reliable financial ground," Davnie said.
Rep. Paul Torkelson, R-Hanska, said Democrats had promised to reinstate the market value homestead credit that a GOP-led Legislature ended two years ago.
"They have reneged on that promise," Torkelson said. "The homestead credit refund is simply a renaming of the property tax refund program that has been in existence for a number of years."
He complained that Democrats are offering "no direct property tax relief to businesses and agriculture land."
Rep. Ben Lien, DFL-Moorhead, said rural Minnesotans' property taxes went up eight times more than others.
Included in the DFL bill are provisions to simplify Local Government Aid the state pays to cities. The House would increase spending $60 million for cities and $28 million for counties.
Lien and Davnie said added aid will help keep down city property taxes, but there is nothing in the bill requiring that the added money be used to cut taxes.
"This bill targets the cities' unmet needs," Lien said.
Davnie said even with the House DFL bill, state payments to cities would remain below 2003 levels.