Homestead tax credit was doomed

Counterpoint

Both a Sept. 21 editorial ("Homeowners will pay for GOP ploy") and a related commentary ("Local taxes come from local governments") spoke to the elimination of the homestead credit.

Some additional information will shed more light on the issue.

First, while the percentage impact on homesteads of average value in selected counties varies widely, the dollar impact -- or what the taxpayer will pay as the result of the change -- presents a somewhat different picture.

For the selected counties cited in the editorial, the increase in taxes on a home of average value if the change had been in effect in 2011 would have been: Anoka, $116; Beltrami, $90; Carver, $101; Faribault, $90; Hennepin, $82; Kittson, $62; Ramsey, $100, and St. Louis, $86.

While it's true that Greater Minnesota loses more ($154 million) than does the Twin Cities metro area ($115 million), that's because homes there get more credit than do their Twin Cities metropolitan counterparts.

In 2011, a home of average value in Greater Minnesota received a $224 credit or reduction, while an average Twin Cities-area home received a $136 credit or reduction.

The estimated 2011 homestead credit of $287 million was cut by $135 million.

Every county, most cities and many townships had their homestead credit reimbursements cut or eliminated.

Our organization said that if the state could not fully fund the program, then it would be appropriate to eliminated the fiscal charade of listing one amount on the homeowner's tax statement and paying another, lesser reimbursement to local governments.

With Minnesota facing a $5 billion deficit and state tax increases being rejected by a majority of legislators, our organization and others had little doubt that the state would not meet its obligation to pay for the promised tax relief to homeowners, and we accepted the lesser of two evils by accepting the end of the chronically underfunded homestead credit program.

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