Governor Dayton quickly vetoed GOP attempts to cut about $900 million from state spending last week, stating in part, that the proposed cuts in LGA would raise property taxes (just shifting the burden). Today he is presenting his budget, which is anticipated to protect LGA and raise taxes.
Here is an interesting perspective on the LGA issue by Mark Haveman from the Minnesota Taxpayers Association. In an article from Finance and Commerce, Haveman makes a persuasive argument that the Governor’s position is not supported by the facts:
“Homeowner property tax burdens are a good proxy for local property tax conditions, and the Homestead Property Tax Burden report from the Minnesota Department of Revenue sheds light on the issue. Data for property taxes payable in 2008 have recently been released and reaffirm that there are significant geographical variations in local property tax burdens. The report confirms that the notion of a full-blown affordability crisis from property taxes is likely overstated. Moreover, if there really are significant affordability problems, it is much more likely to exist in the seven-county metro area – not outstate, where most of the pressure for the status quo resides. Consider the following findings:
- Homeowners in the metro area had an 89 percent higher median net property tax than homeowners in Greater Minnesota ($2,387 vs. $1,259).
- On the whole, homeowners in the metro area devoted 3.19 percent of their income to property taxes – a 39 percent higher share than their Greater Minnesota counterparts, who devoted 2.30 percent of their income.
- In seven of the 10 Greater Minnesota regions, net property taxes for all levels of government, including schools, were less than $1,000 for more than 40 percent of all homesteads. In two regions the total net property tax bill was less than $500 for more than a quarter of homesteads.
You can read the entire article at Finance & Commerce. More on the Governor’s budget later.