Note: Star Tribune Commentary Editor D.J Tice responds to criticisms of his March 6 column by Rep. Rod Hamilton, R-Mountain Lake, and Rep. Kathy Sheran, DFL-Mankato.
I thank Rep. Hamilton and Sen. Sheran for their civil and substantive rebuttal.
But, with respect, their argument strikes me as something of a heads-I-win-tails-you-lose proposition.
Believing that greater Minnesota communities suffer “inequalities” related to property taxes, the lawmakers argue that the state should make it a priority to reduce those inequalities.
But when responding to an argument that in fact the real inequalities victimize someone else -- taxpayers in the metro area, and even in the suburbs -- the lawmakers become tough-minded individualists.
This is just the way property taxes work, we are told, and people must live with the choices they make.
Shouldn’t one response to inequality apply?
Consider a few of their key points:
Yes, property taxes work this way, as my column noted. But this basis for local taxation is not an inexorable fact of life - like tooth decay or Charlie Sheen - that we simply have to live with.
It is a choice made by policymakers, and they could make a different choice.
Or, if there are good reasons to tax property (and there are), government could at least establish policies to reduce the undesirable effects of taxing this way.
And, of course, government does establish policies that purport to make things fairer -- policies like local government aid.
The whole argument for LGA is built on the recognition that property-based taxation can produce inequalities, requiring, the legislators say, that we “reduce inequalities between property poor and property rich cities.”
But why must we reduce such inequalities? Why isn’t it a sufficient answer to say, as the legislators do: Like it or not, property taxes are based on property value -- so naturally property poor communities have a smaller tax base?
One gathers that in the end the legislators don’t like inequality. Neither do I.
The point of my column was to explore whether the property tax-relief policies we have in place really do correct the real inequities among taxpayers. I fear that they do not. Check out the report and judge for yourself.
The impression is created here, and is nowhere corrected by the lawmakers, that the Voss report is all about comparing tax burdens for wealthier suburbanites against those facing lower income residents of greater Minnesota.
This isn’t true.
The Voss report allows the comparison I made in the column - a comparison of property tax burdens for metro and outstate residents with comparable incomes.
And the Voss data show that people with roughly similar incomes pay sharply higher property tax in the suburbs than they do outstate. Again, check it out for yourself.
Why does this make sense? Does it cost less to provide a road to a $76,000 home than to a $325,000 home?
Is sending a squad car or fire truck less costly when the home being served has a smaller market value? Are kids growing up in lower valued homes less expensive to educate?
There may be some crude association between home value and some higher government costs -- more street frontage on a larger lot, say, or higher wages rates in areas with higher housing costs. But this relationship is limited.
“[H]omeowners in southwest Minnesota actually pay a higher amount of property taxes compared to the value of their home.”
Perhaps this explains why the lawmakers focus on this one comparison. (I actually used figures from quite a number of regions in my column.)
The Voss data show that the “effective tax rate” in southwest Hennepin County is higher than the rate in nine out of ten regions of greater Minnesota -- all of them except the Southwest region. Overall, the effective tax rate in the metro area is 11 percent higher than the overall rate outstate.
Well, exactly. People in Minnetonka have made a choice - and so have people in Mankato. People in Moundsview have made a choice - and so have people in Mountain Lake.
But if the fact that people choose where to live means that they should all mind their own business, enjoy the advantages of their chosen locations and endure the disadvantages, this whole argument can be put to rest.
Let’s let everybody make -- and pay for - their own choices. There will be few protests in the suburbs.
Frankly, though, that seems a little harsh. We’re all in this together.
But surely the fact that people choose where to live can’t mean that any inequities facing suburbanites are of no concern to anyone else, while supposed inequities facing those in Mankato and Mountain Lake should be a constant source of worry in Minnetonka and Moundsview.
It’s true that there are numerous forms of state aid to local governments and taxpayers. But the Voss report cuts through all this complexity and leaves us with a simple fact.
When all credits, refunds and intergovernmental transfers are accounted for, people with similar total incomes pay significantly higher property taxes in the metro area (including suburbs) than they do outstate, and some rural residents pay very low property taxes by any standard.
D.J. Tice is the Star Tribune's commentary editor.
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