You’re irritated that the “Truth in Taxation” statement you recently received shows a property tax increase coming next year? You’ve got company. The State Capitol is full of annoyed DFL-majority politicians who beefed up state aid to cities, counties and schools last spring in the expectation that most of those jurisdictions would curb or cut their levies in response.
Instead, preliminary totals show more increases than rollbacks, enough to produce projected average statewide increases of 2 percent, state revenue officials reported last week. (See box, right.)
Republicans, too, are outraged — or so several of them said in statements that barely hid their glee over the possibility that they can make political hay with higher property taxes next year.
All that angst may be overwrought. “Truth in Taxation” statements aren’t the final word on 2014 taxes. They are preliminary bids that serve as a high-water mark from which, in most years, actual tax bills recede before they are issued in March. What’s more, the numbers omit the enriched refunds that the Minnesota Budget Project says will reach 550,000 renting and owning households next year, 140,000 more of them than in 2013.
Further, in many parts of the state, responsibility for higher property taxes lies not with elected officials, but with voters themselves. Nearly a quarter of the state’s school districts went to their voters on Nov. 5 to request either higher or extended levies; in 90 percent of those districts, voters answered yes. The result, the Revenue Department projects, is a $60 million school levy increase statewide, compared with a projected $59 million drop before the election.
Still, we’re not urging that concern about higher property taxes be stifled. We recommend the opposite. The stewards of local government budgets deserve to hear promptly from property-owning and renting constituents who consider their Truth in Taxation bids too high. (Information on how and when to register concern is printed on Truth in Taxation forms.) Minnesota taxpayers endured 11 straight years of property tax increases while a squeeze on the state budget deprived schools and local governments of needed support. That squeeze ended with the 2013 legislative session. The string of tax hikes ought to run out, as well.
Unhappy state leaders, starting with Gov. Mark Dayton, are also right to jawbone local officials to rein in their appetites for higher taxes. Dayton and the 2013 Legislature’s DFL majority put themselves at political risk for local governments’ sakes. They raised taxes on high-end individuals, smokers and some businesses to pay for a major increase in pre-K-12 school funding ($485 million over two years), a sales tax exemption for local governments ($129 million) and increases in city ($80 million) and county ($40 million) program aid.
The Revenue Department said in July that it expected the city and county share of those aid increases to translate into property tax cuts of at least $121 million next year. It still can, provided local governments act accordingly between now and the Dec. 27 levy certification date.
Some jurisdictions are showing the way. (To see your local jurisdiction’s preliminary numbers, visit http://tinyurl.com/olksutc.) State Revenue Commissioner Myron Frans was in Hastings this week to praise its projected 2.5 percent levy reduction, which when combined with Dakota County’s 0.5 percent rollback and the Hastings school district’s estimated 3.8 percent cut should bring its property owners and renters smaller tax bills next year. (Those are averages; individual tax bills also depend on property valuation changes and shifts within jurisdictions, and can vary widely.)
The commissioner also had praise for Minneapolis. Its city levy is projected to fall by 0.9 percent next year. By comparison, St. Paul’s projected levy is unchanged from 2013.
To be sure, local circumstances vary. In many places, a pent-up demand is waiting to be satisfied. Equipment purchases, infrastructure repairs, building improvements, new hires and salary increases were put on hold as state officials squeezed local aid to cope with recurring deficits from 2002 through 2012. One more year of increases is needed to catch up, many are likely thinking.
They should also think this: In 2014, they won’t be able to credibly deflect responsibility for higher taxes to St. Paul. Minnesota taxpayers are informed citizens who know that the 2013 Legislature set the table for property tax restraint. If restraint doesn’t ensue, citizens will know who to ask “Why not?”