The Free Press, Mankato, MN

November 15, 2013

Hold feet to fire on property tax relief

Why it matters: The Legislature funded millions in property tax relief and now cities and counties must make sure they provide it.

The Mankato Free Press

---- — A preliminary report on city and county property tax levies for 2014 should be troubling to taxpayers as average levies suggest an increase even after the state poured millions of dollars back to cities and counties for property tax relief.

The consolation at this point comes from the fact that the levies are preliminary and are set at the highest level they can be. In that sense, the average 2.1 percent increase for cities and the 1.5 percent increase for counties suggest that is the most tax levies will go up.

Typically, cities and counties reduce those amounts when they decide on the final levies in December. But taxpayers should hold local officials feet to the fire on this issue.

We suspect many area cities and counties will reduce their levy, and there very well could be an overall reduction in the average levies across the state. The Dayton administration is encouraging cities and counties to provide some property tax relief to homeowners and businesses. That’s because they more or less promised that would be the result of the hundreds of millions of dollars in tax relief measures they passed.

Revenue Department officials in July predicted a $121 million cut in statewide property taxes, which would have been the first decline in a decade, according to a report in the Star Tribune.

Revenue Commissioner Myron Frans told the newspaper he was still optimistic there would be property tax reductions, though he seemed to suggest some cities and counties were “filling potholes” or otherwise making up for lost funding over the last few years.

Frans said school levies were also set to decline about $60 million as school benefited from increased state funding. But voters also recently approved a $120 million increase in levies.

Cities and counties have no doubt seen funding cuts and service cuts over the past 10 years, but many, including Mankato and other regional cities, have still figured out how to provide good services at a lower cost. Many have reduced their employment and found other savings.

Increasing levies at the city and county level as the Legislature for the first time provided relief would not likely garner much favor with taxpayers, and rightly so. The tax relief funding is not a reason to go on a spending spree at the city and county level. Local leaders will have to provide strong justification for any increase in spending. Needs must always come before wants.

The Legislature cut $129 million worth of sales taxes to cities and counties and increased aid by about $130 million. So far, preliminary levies would increase property taxes by $80 million for cities and counties.

Blue Earth County was apparently required by the Legislature to have a zero percent increase in its levy this year via a complex formula.

The city of Mankato has set a preliminary levy increase of 2.3 percent, though Councilman Mark Frost recommended a 0 percent increase that did not find support at a September Council meeting. North Mankato has proposed a zero levy increase this year. St. Peter has proposed a 3 percent preliminary levy increase. Nicollet County has proposed a 9.6 percent increase. All cities and counties can lower their levies before they become final in December.

After years of seeing reductions in state aid, cities and counties finally have received at least part of what they were asking for from a DFL Legislature and governor. It would be unwise to turn that upside down and poke holes in the argument that state policies can help reduce the tax burden at the local level.

Lower property taxes benefit businesses in a local community, many who have been struggling through several years of recession and reductions in business while costs increase. Farmers and taxpayers have also seen their property taxes go up in the last 10 years. All deserve relief.

Now is the time for cities and counties to make a statement that they are following through on promises for lower taxes with the help of state lawmakers.