Property taxes projected to drop $120 million in 2014

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The Minnesota Department of Revenue is projecting a $121 million decrease in property taxes next year, MPR reports, the first reduction in more than a decade.

The revenue department said the projection is “based on prior experience of what we’ve seen counties and cities do with this kind of aid,” Revenue Commissioner Myron Frans said at a news conference Tuesday.

Gov. Mark Dayton attributed the drop to an increase in local government aid (LGA) and credited the DFL state budget plan that raised $2.1 billion in new taxes.

Frans says without the additional money to local governments, the state was looking at a projected $180 million increase in property taxes in 2014, the Star Tribune noted.

Republicans remain skeptical of the estimate.

"I think his projections on what will happen with property taxes are about as reliable as the e-pull tab projections," said Senate Minority Leader David Hann, R-Eden Prairie, citing the off-the-mark estimates of electronic pull-tab revenue that was intended to fund the new Vikings stadium.

Hann also disagreed that an increase in LGA leads to a decrease in property taxes.

Frans told MPR that the numbers are preliminary and may change when local government officials make final spending decisions and set the property tax rate. A final analysis won't be complete until February.

If the projections pan out, Frans said 2014 will be the first drop in property taxes since 2002, Politics in Minnesota reports.

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