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Elections: Property taxes remain top priority

BEMIDJI – November’s ballot will include a full plate of major political decisions for Minnesotans.

Besides picking a president, voters will also be asked whether same-sex couples have the right to marry and whether citizens should be required to show ID to vote. That’s on top of selecting members to send to the Legislature, where everyone is up for re-election. 

The latter choice could have an impact on property taxes in greater Minnesota.

To that end, representatives of the left-leaning Alliance for a Better Minnesota were in Bemidji Thursday to advocate for the return of the Market Value Homestead Credit, which was eliminated as part of the deal that ended the state budget shutdown last summer.

The Alliance blames that change, and Republicans who backed it, to an 8.1 percent increase in property taxes in greater Minnesota.

Under the old program, homeowners received a credit on their property taxes that was reimbursed to the municipality by the state to make up for the difference.

The new system, the Homestead Market Value Exclusion, excludes a portion of a property’s value from tax calculations. That means many municipalities have had to make up the difference by increasing property tax rates. The switch also saved the state about $260 million per year.

“Any time the Legislature excludes values, which in turn reduces the tax base…it causes rates to go up,” said Beltrami County Auditor Kay Mack.

Lena Gould, a policy analyst at the League of Minnesota Cities, said the tax base in Minnesota has decreased about 6 percent because of the exclusion. That’s in addition to a 3 percent drop due to the housing crisis and other factors. 

Part of the reason for going to the exclusion was giving municipalities more certainty. With the old system, the state would often not pay out the full amount of homestead credit dollars that cities and counties were expecting.

“It was a program that wasn’t working,” said Sen. John Carlson, R-Bemidji.

While the change generated some backlash last year, headlines have been dominated by legislative scandal, the Vikings stadium bill and debate over two contentious constitutional amendments. Carlson said it hasn’t been an issue for constituents he’s talked to.

“I’ve knocked on a lot of doors this summer and not one person has brought that up,” he said. Carlson added that the state’s tax code needs to be revisited.

Rep. Paul Marquart, DFL-Dilworth, sponsored a bill last fall to bring back the credit. He said Thursday that he plans to bring the issue back up next session.

 “It’s certainly on (voters’) radar,” he said.

John Hageman

John Hageman covers North Dakota politics from the Forum News Service bureau in Bismarck. He attended the University of Minnesota in the Twin Cities, where he studied journalism and political science, and he previously worked at the Grand Forks Herald and Bemidji Pioneer.  

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