Property Tax Legislation: HF 3149

As early as next week, we will be debating a property tax proposal on the House floor. With most homeowners being squeezed by skyrocketing property taxes, I thought it would be a good idea to discuss the proposal as well as remind folks of the property tax refund options currently available.

Since 2002, Minnesota property taxes have increased over $2.7 billion dollars, an 81%increase for Minnesota homeowners. These increases have hit lower and middle-class homeowners the hardest, making our tax system more regressive.

The current House property tax proposal aims to base property taxes on the "ability to pay," targeting relief to homeowners that need it most – seniors, families, and farmers.

The plan would cut homeowner's property taxes by an expected 5.7% in 2009 by combining the state's existing property tax refund program into a more progressive system. It creates a Homestead Credit State Refund that provides permanent relief to any homeowners whose property taxes exceed 2% of their income, especially aiding those on fixed incomes. 95% of Minnesotans would be eligible for the credit.

This legislation will move through Ways and Means yet this week and then to the floor. It will be the subject of a thorough debate. Many in our district are struggling with property tax increases. Efforts to address this last session were thwarted. I am hopeful that this legislation will become law.

It is important to know that there are current options for you. You may already qualify for existing property tax refund:

Targeted Property Tax Refund - if you are a homeowner and the net property tax on your homestead increased by more than 12% and at least $100 from 2007 to 2008.

Homeowner and Property Tax Refund - if you have a household income of up to $93,480 or are a renter and have an income up to $50,430.

Senior Citizens Property Tax Deferral Program – Available for seniors to defer portions of homestead property taxes.

To apply for a property tax refund, you must complete the M1PR form. It can be found online here: www.taxes.state.mn.us/taxes/forms/m1prfillin_07.pdf

If you have additional questions:

Department of Revenue – (651) 296-3781, or indinctax@state.mn.us

Check status of existing refund: (651) 296-4444 or www.taxes.state.mn.us/taxes/prop_refund/index.html

Happy Earth Day

On the 38th anniversary of Earth Day, I thought it would be appropriate to talk about a project underway at the House of Representatives designed to cut down on our waste.

Last summer a Task Force on Paper Waste Reduction was started to set goals for waste reduction within the Capitol and set an example for waste reduction throughout Minnesota.

Here are the goals

- Reduce overall House paper usage by 20% through various strategies of reusing, recycling, and conserving

- Increasing the Duplex Rate to 50%

- Giving paper a "second chance"

- Switch from legal to letter size paper for bills

Audits from the House found that in a 15-month session, the House purchased over 60 tons of paper, or over 12.6 million sheets. Several practical efforts are underway to bring that number down.

- Smaller amendments to bills are being printed on letter-sized paper and further transition is being considered

- Duplicating Center is testing 100% recycled paper, hopefully leading to fully implemented use of 100% recycled paper

- Increased recycling bins on the House Floor, and other areas of the Capitol and State Office Building

We are already seeing gains, but this is a work in progress. We will continue to work toward conservation-minded practices that are both cost-effective and environmentally friendly here at the Capitol.

Enjoy the rest of Earth Day and the budding spring.

Mighty Citizens: Time to Act

Call Governor Pawlenty and Urge His Action on the Central Corridor

For years, federal, state, and local officials have worked tirelessly to move Minnesota toward a 21st Century transportation system. This hard work culminated last week when we sent the Governor a bonding bill that included $70 million in funding for the Central Corridor light-railway between St. Paul and Minneapolis. The only thing left before the project became a reality was a signature from Governor Pawlenty.

Unfortunately this Monday, the Governor chose to line-item veto the Central Corridor from the Bonding bill. The Governor has both the authority and the responsibility to apply his perspective to the work of the legislature and one tool is the veto. But the veto of this project took the Bonding bill well below the $825 million dollars the Governor set as his stated limit. The Governor's veto pen brought a vision for a better, safer, Minnesota transportation system to a screeching halt.

It's difficult to understand the Governor’s action. He asked local leaders to trim the project and they did. He was in favor of the proposal less than two months ago when he included the project in his own bonding proposal. He championed the need to address global warming by reducing greenhouse gases, and the Central Corridor was by all accounts, our best single chance to reduce those gases.

The Governor's decision to veto Central Corridor is disappointing for several reasons, but perhaps most significantly, the Governor jeopardized hundreds of millions of federal dollars with his veto. Building light-rail is expensive, and several major regions are competing for scarce federal dollars. By pulling the rug out at the last minute, those funds are now likely to go elsewhere and the corridor will go to the back of the line for future funding.

The Central Corridor project is vital to the long-term development of Minnesota's changing transportation system. It is critical to our efforts to reduce greenhouse gases. Governor Pawlenty is the one person who can move Central Corridor forward and he has put on the brakes.

If it is important to you, I encourage you to call Governor Pawlenty (651-296-3391) and ask him to put Central Corridor back on track.

Balancing the Budget

As you are likely aware, Minnesota faces a $935 million state budget deficit. We are working at the Capitol to reach agreement on a plan to balance the budget. The Governor has offered his budget-balancing proposal and the House has developed its proposal. The House is working into the night on this bill and the many amendments. We began today's session at 10 in the morning and at 1 in the morning, we are still at it.

There are some areas of agreement between the Governor and the House as well as key differences. I'm glad the Governor is finally on board with a plan to close corporate tax loopholes for companies that shield profits overseas. However, I am disappointed the Governor again plans to make deep cuts that profoundly affect our most vulnerable citizens. The Governor would cut $31 million from nursing homes and long-term care workers, over $50 million from the University of Minnesota and MNSCU schools (could lead to higher tuition), and uses $250 from the Health Care Access Fund, which provides health care for hard-working Minnesotans who do not have health care access.

The House budget proposal takes a more balanced, responsible approach. In our proposal K-12 education and nursing homes would get a needed funding increases through existing revenue, so other programs aren’t cut as a result. Instead of cutting the Health Care Access Fund, our proposal used part of our state's $1 billion budget reserve to fill the gap. Our budget fix includes cuts, but they are largely directed toward state agencies and the state legislature.

The Governor's plan could have serious negative long-term implications because its isn't responsible, or even effective, to only "cut" our way out of a budget deficit. In 2003, the last time we had a deficit, the Governor cut schools, health care, and nursing homes. Five years later we have skyrocketing property taxes, under funded nursing homes, and college tuition that is twice the national average.

The 2003 budget cuts asked lower and middle-class Minnesotans to shoulder too large a burden. A 2007 Department of Finance Tax Incidence Study concluded that in total taxes (income, property, sales, etc.) lower and middle-class Minnesotans now pay a larger percentage of their income than the wealthiest 1%, those making over $350,000 a year. You can look at that study here: http://www.taxes.state.mn.us/legal_policy/research_reports/content/incidence.shtml
We need significant tax reform that more fairly asks all Minnesotans to pay their fair share.

We are constitutionally mandated at the state legislature to balance our budget by the end of this session. This is a good thing. It means we cannot run up years of budget deficits that must be paid off by future generations. But the way we balance our budget does have a profound effect in the long-term economic health of our state.

Our House budget proposal responsibly contemplates both the short and long term implications for the future.