In a Land of 10,000 Lakes - many surrounded by a healthy contingent of cabins - it's no wonder some waterfront property owners are upset with the phasing out of a cap that protected their property tax bills from reflecting the estimated full market value of the property.
Effective in 2010, the property tax bills of such places finally will fully reflect their estimated market value - a value that's generally risen much faster than typical residential properties.
It's a change long overdue, not just in the name of fair treatment of all property owners, but especially for a state facing so many fiscal challenges.
The cap is called limited market value, and as Minnesota Public Radio reported last week, its genesis was to limit property tax increases when property values increased rapidly.
Of course, most residential waterfront and some farmland values escalated rapidly throughout the 1990s, which made the gap between market value and taxable value grow. In fact, MPR reported that in 2004, the peak of the LMV era, about $32 billion was excluded from state property tax rolls.
Meanwhile, other property taxpayers continued to pay their fair share and then some.
Will this change prove a financial challenge for some? Perhaps. But it still should end. The reality is since at least 1993, LMV properties have received an often-healthy annual tax break.
And let's be honest. In many cases, especially for waterfront properties, that break went to owners who clearly had the affluence to acquire and afford what often serve as seasonal residences.
Add to that the state's deteriorating fiscal conditions this decade and it's very clear the Legislature and governor need to eliminate caps (and other loopholes) both to help state coffers and create an even playing field for all residential taxpayers. As much as it sounds cold-hearted, the state is doing the right thing in ending the cap.
- St. Cloud Times
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