Among the many items found in Gov. Mark Dayton's sweeping budget and tax reform proposals unveiled Tuesday was a treat for homeowners: a $500 property tax rebate. He called it real tax break for middle-income families.
Dayton's office says the rebate would reduce the average homestead tax burden 22 percent in 2013, and cut taxes a total of $1.4 billion in the FY 2014-15 biennium. Dayton says the state relies too heavily on property taxes, the Associated Press reported.
But it was not immediately clear whether the Legislature is likely to approve the proposal, which lawmakers will mull as part of the broader package.
DFLers have been supportive. Sen. Rod Skoe, DFL-Clearbrook, told Forum Communications that Minnesota homeowners have been asking for property tax relief.
“That’s one of the priorities we had,” Senate Taxes Committee chairman Skoe told Forum. He said the panel will examine whether the credit is the best way to provide that relief.
But concerns about property taxes are often overstated, says Mark Haveman, executive director of the Minnesota Center for Fiscal Excellence, formerly known as the Minnesota Taxpayers Association.
As outlined by Dayton, homeowners would apply for the rebate beginning with the 2013 income tax form that would be filed in 2014 (for property taxes paid in 2013), Jeff Van Wychen, a former Dayton aide and director of the progressive think Tax Policy & Analysis at Minnesota 2020, notes in MinnPost.
More broadly, Minnesota has one of the most complex property tax structures in the nation, Dakota County Commissioner Kathleen Gaylord, who leads a group that made recommendations to simplify the state's property tax system, told MPR on Wednesday.
Those recommendations, found in a November 2012 report, were not part of the governor's proposals Tuesday. It's politically difficult to convince lawmakers to embrace those kinds of proposals, she said.
The group's report explains why the state's property tax system is so complex and offers a timeline that sheds light on how it got that way.