Your letter: MVHC repeal will mean more property taxes for you
As you get ready to pay the second half of you Minnesota property taxes, take a look at the line on your statement called Market Value Homestead Credit (MVHC). Thanks to the 2011 Legislature, this program is completely eliminated and your property taxes will go up. What's more troubling is that in this tough economy, businesses will also pay a lot more in property taxes because of this short-sighted decision.
The Legislature voted to end the MVHC program that gives tax breaks to homes valued at less than $414,000. Republicans will claim they replaced MVHC with a new program called the homestead market value exclusion, but this new program barely puts a dent in the increases homeowners, renters and especially our local business will see in higher property taxes.
According to non-partisan legislative research, property taxes in our area cities will increase by 5.2 percent or $6 million next year with agricultural land going up 7.2 percent and people renting in apartments will see a whopping 10.1 percent increase. Towns up north fare even worse with total property tax increases of 5.5 percent of $10 million and area homeowners get nicked with an 8 percent increase.
This huge jump in property taxes is a direct result of the House and Senate's insistence to cut local government aid and the Market Value Homestead Credit program to solve the 2011 budget deficit. In our fragile economic recovery, increasing property taxes on local businesses, homeowners and renters is short-sighted and just plain wrong.
To make matters worse, rural Minnesota gets hit with three times the property tax increase of wealthy metro areas. Area businesses get hit with higher property tax increases if six times more than businesses in the metro area-this is not a sensible way to grow jobs and our economy.
In addition to cutting the MVHC program which keeps our property taxes down, legislative leaders cut more than $275 million in local government aid. It's estimated that 50 cents of every dollar the state spends on aid to local governments goes toward keeping property tax levies down. This LGA cut will lead to additional property tax increases for all property taxpayers.
No matter how you slice it, local governments cannot be blamed for having to raise levies when the state aid they need to pay for critical services is cut. Cutting local aids and telling cities, counties, and towns to "make do" does not reduce property taxes. The costs are still there and although our cities, towns and counties have tightened their belts, the reduction in state aid is paid for by increased property taxes.
Your legislators will continue to claim that they are not responsible for raising property taxes. This is just not true. According to non-partisan legislative analysis, property taxes on business, renters and homeowners will increase significantly because of the tax law policies that the majority in the Minnesota legislature pushed through.