The Free Press, Mankato, MN

State, national news

February 28, 2014

State's property taxes mostly static after refunds

ST. PAUL (AP) — Minnesota property taxes owed this year are mostly static once refunds and credits are factored in, state officials said Friday, despite their earlier prediction that those taxes would drop considerably.

A Department of Revenue analysis shows a net $8 million drop in a property tax system that generates $8 billion a year. That means the reduction is a slim 0.1 percent.

Here's where it gets complicated: Homeowners and businesses will pay a total of $125 million more in 2014 than they did in 2013. But $133 million in property tax refunds and credits will cancel out some increases for those who qualify.

Income-based refunds aren't automatic. Last year, slightly more than half of homeowners got a property tax refund. The average refund for those 341,000 homeowners was $796, according to the department. About half of renters also qualified for refunds averaging $592.

"A refund is a refund. It is actual money," Revenue Commissioner Myron Frans said in an interview. "The simple fact is property taxes statewide have gone down for the first time in over a decade. Those are the facts. There's no cooking the books."

Gov. Mark Dayton, Frans and legislative Democrats made a highly publicized prediction last summer of tax savings of $121 million after the Legislature boosted state allowances for schools and local governments. Those entities impose the lion's share of the property taxes people pay and they all will take in more than they did the year before.

Republicans accused Dayton and fellow Democrats of failing to deliver on a key promise. Rep. Paul Torkelson, R-Hanska, focused on the $125 million in property tax obligations despite the extra money the state devoted to keeping levies low.

"In 2013, Democrats sent local governments $292 million in new money claiming it would lower property taxes," Torkelson said. "Despite Democrats' repeated promises to reduce property taxes, Minnesotans learned today they are facing the highest property tax levy in state history. Governor Dayton and Democrats set the target and they missed."

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