The Free Press, Mankato, MN


September 3, 2013

State actions giving property tax relief

Why it matters: Local property tax payers finally getting some relief, but focus must be on reducing property taxes in coming years.

Area property taxpayers are getting mostly good news as cities and counties set their budgets and tax levies for 2014.

A look at four of the largest government budgets — for Blue Earth and Nicollet counties and Mankato and North Mankato — show levies are either not being increased or raised by about 1 percent.

The relief is needed: The Minnesota Revenue Department recently reported that Minnesota property taxes have increased for 11 straight years.

This year’s break in that cycle comes thanks to actions by Gov. Mark Dayton and the Legislature, who increased local government aid payments to counties, cities and townships by $130 million. The Dayton administration has conservatively projected that funding — along with legislation that ends the silly policy of making local governments pay state sales tax — will cut property taxes by $121 million statewide in 2014.

Those moves will mean Blue Earth County will get $400,000 in new state aid and will save the county about $300,000 in exemptions from the sales tax.

The Legislature also wisely increased property tax refunds for low-income renters and homeowners, which will keep more people — many in rural areas — in their homes.

Besides the necessary changes made by the Legislature, a steadily improving economy will aid property taxpayers as more new construction means a larger tax base over which to spread property tax collections.

While the constant increase in levies has been stalled for 2014, taxpayers should expect local governments to see this as only a start toward a goal of longer-term decreases in property taxes.

Local governments note that even with increased state aid their costs are rising due to negotiated salary increases and new expenses. Mankato city employees, for example, will see a 2 percent salary increase next year and taxpayers will fund a 3 percent rise in employee health insurance costs. In Nicollet County, officials note they will have to spend about $500,000 more next year for extra Human Services staffing to help implement the new Affordable Care Act.

Costs for everyone, including governments, rise. But local government officials need to redouble efforts in the years ahead to ensure the devastating trend of rising property taxes of the past decade is not just stopped, but reversed.

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