If Minnesota lawmakers are ever going to bring some sort of equity to our state property tax system 2000 would seem to be the year to do it.
With a $1.6 billion state surplus, the Legislature should continue the work it started in 1997 to restore some balance between the amount of taxes paid by home owners and businesses.
For years homeowners have enjoyed a break in the amount of property taxes they pay because it was an easy political choice for legislators to make businesses pay more. People vote. Businesses don't.
Unfortunately, placing too much of the tax burden on the business side can wreak havoc on the state's business climate.
Another argument for lessening the disparity between business and homeowner tax rates is the issue of accountability. It's too easy for homeowners and politicians who represent them to push the tax burden on to businesses on the theory that if the voters don't feel the pinch, it's not really hurting anybody.
The Minnesota Taxpayers Association has analyzed the Legislature's first efforts at property tax reform in 1997. The data on 1998 and 1999 property tax reform legislation is not yet available for evaluation. In its study, MTA compared 1998 rates to 1977, the first year when comparable data was available.
While property tax rate reductions were seen in most categories after the 1997 legislative action, one category of tax rates was not lower than 1977. That category was business property. Property tax effective rates for business property were still 12.5 percent higher in 1998, when compared to 1977.
The upshot of the study is that the state is moving in the right direction but the task is not complete. Even with the reforms that have been put in to place there is considerable disparity between the rates paid on business property and homesteads.
"The temptation to ease homeowners' tax burdens while shifting the burden to businesses is great," the MTA concludes.
Sen. Don Samuelson said last week that property tax reform has been an issue that various governors and legislatures have grappled with for years.
"I don't know of a governor who hasn't had a blue ribbon commission to deal with the property tax issues in the last 30 years," he said.
That's all the more reason to strike now on the property tax issue, at a time when a shift can be made with relative ease.
Brainerd Dispatch ©2013. All Rights Reserved.