Your letter: Rep. Murdock's Vote to Eliminate the Homestead Credit Hurts Rural Minnesota
In his recent letter defending his vote to eliminate the Homestead Credit, Representative Murdock implies that his vote to cut $538 million in property tax relief aid will not lead to higher property taxes. That is simply not true.
Thanks to Representative Murdock, 95 percent of homeowners in Minnesota will lose their Homestead Credit - a direct property tax credit that anyone with a home valued under $414,000 used to receive. The average credit in 2011 was $202 and the maximum credit was $304. Starting in 2012, the Homestead Credit will be completely eliminated.
Rural Minnesota will be especially hard hit by changes. According to nonpartisan independent research, because of the elimination of the Homestead Credit, rural Minnesota property owners will see a property tax increase THREE times greater than metro area communities. Businesses in rural Minnesota will be hit with a property tax increases SIX times greater than these same metro areas.
The Homestead Credit will be replaced by a new program that provides $0 in property tax relief. The new program simply shifts which properties pay higher taxes (farms, renters and businesses will be especially hard hit).
Even if cities, counties and school districts keep their property tax levies the same as last year - not one new dime of increase to account for inflation or population growth or new service demands - property taxes will still go up significantly. In fact, local units of government will need to cut their levies and budgets significantly to prevent any new property tax increases. That is because there will be no Homestead Credit aid to buy down property taxes.
Representative Murdock defends his plan to eliminate the Homestead Credit by claiming lobbyists for local units of government asked for the change. It made me wonder, did Representative Murdock ask his constituents if they wanted to permanently lose their direct property tax credit or did he just talk with paid lobbyists? In his letter, Representative Murdock ticks off lobbyist talking points about elimination of the credit but he fails to explain the impact on his constituents.
Legislators who backed the Homestead Credit elimination need to step up and take responsibility for their actions. I hope that Representative Murdock will stop listening to lobbyists in St. Paul and start thinking about the impact on his constituents in Wadena, Perham and other cities in his district.
Representative Paul Marquart is former Chair and current Minority Lead on the Property Tax Committee.