Hemorrhaging Homesteads: Projecting 2012 Property Tax Increases
Homeowners, renters, business owners, and farmers, nearly everyone should expect to pay more in property taxes next year, despite conservatives’ “no-new-tax” promise.
Conservative-crafted fiscal policy, enacted during Minnesota’s 2011 Special Legislative Session, cut more than $630 million in property tax aids and credits, including eliminating the Homestead credit, which provides property tax relief for middle-class Minnesotans.
As a result, local property taxes are projected to rise statewide by $376 million dollars in 2012, or about 4.6 percent, according to nonpartisan House research. The Twin Cities, suburban middle- and working-class communities and much of greater Minnesota will be hardest hit, with many seeing property tax hikes near 6 percent, according to House research projections.
Respected Minnesota economists echoed progressive policy advocates in calling for a fair and balanced approached to solving the budget deficit. Instead, the conservative-controlled legislature shifted the state’s deficit burden to the state’s middle-class to protect Minnesota’s richest.
These cuts continue a long-term trend, where conservatives have slashed aid to Minnesota cities and counties, forcing local leaders to cut services and raise property taxes and fees, giving the state a more regressive tax system.
By fiscal year 2013, the state will have cut $3 billion in aids and credits to local governments, using constant 2011 dollars.
To restore Minnesota’s fiscal fairness, MN2020 calls for policymakers to:
- Abandon failed “no-new-tax” policy pledges that protect the richest Minnesotans from paying an effective tax rate more in line with middle-class Minnesotans.
- Restore the Homestead Credit.
- Return to a fair and balanced approach in solving our state’s budget deficits.