Entenza says House DFL plans to seek property tax relief

"MN House"

10/13/2005

Thursday, October 13, 2005

By Brad Swenson
Staff Writer

Double-digit property tax increases will prompt the Minnesota DFL to seek property tax relief in the 2006 session, House Minority Leader Matt Entenza said Wednesday.

And that relief can come through higher-than-expected state revenue collections pegged at $282 million for the state’s first quarter, Entenza, DFL-St. Paul, said at a Bemidji airport news conference.

Citing figures from the non-partisan House Research Department, Entenza said many cities will see more than 10 percent hikes next year in their property taxes, and he blamed Republicans’ tax policy as the culprit.

Property taxes will increase more than 15 percent for Brainerd homeowners, he said, while the increases are more modest in Bemidji at about 4 percent. The hike is 17.3 percent in St. Paul and 16.4 percent in Moorhead.

Commercial property taxes in Bemidji, however, will climb 15 percent.

“The reason for that is the so-called no-new-tax pledge where Republican leaders are pushing taxes down to property taxes, protecting a few wealthy Minnesotans at the expense of everybody else,” Entenza said.

“Minnesota homeowners are paying the price in a big way, particularly farmers, seniors, those on fixed income, who can expect increasing pressures and wonder if they can afford to stay in their homes,” he said.

House DFLers, he said, “are committed this next legislative session to using new state funds as they come in to try to keep property taxes down and to fairly fund our schools,” Entenza said.

The primary cause is the insistence of Republican Gov. Tim Pawlenty and state Republicans to use property taxes to pay for part of the increase in K-12 funding, pegged at 4 percent more each year of the biennium in general per student funding.

“The governor’s bill, with more than $139 million in new property tax increases, are now having a double whammy,” Entenza said.

Schools should be funded through state revenues, not property taxes, a move which began in 2001 with a state takeover of education funding and which has since slipped as has state revenues.

Putting more onus back on property taxes means that Minnesotans, “instead of having schools that are equal across the state, have better schools in property wealthy areas and schools that aren’t as good in areas that aren’t as property wealthy.”

Bemidji was able to hold its property tax increase down because the city benefited from restored Local Government Aid which is given to property poor cities, Entenza said. Democrats fought to restore $46 million of the $150 million in LGA Republicans and Pawlenty cut in 2003.

Also, the Bemidji School Board has pledged not to raise taxes as part of winning approval for an operating levy two years ago. There is another year yet to go on the no-discretionary tax increase promise.

While Entenza took the House DFL tax study around to six cities on Wednesday, the Pawlenty administration was quick to downplay the significance of the issue.

“Matt Entenza pointing fingers at others for higher taxes is like oil companies looking for someone to blame for higher gas prices,” Brian McClung, Pawlenty’s spokesman, told The Associated Press.

McClung said Democrats should have supported proposals backed by the governor to hold down local property taxes, including a state-mandated property tax freeze, levy limits or taxpayer-triggered referendums on increases.

He also said rising property values not higher school taxes are the main reason property taxes are going up.

In the same House Research study, taxable market value for all classes in Bemidji rose 11.2 percent, and 12.1 percent in Brainerd.

Pawlenty, in the heat of the budget debate last spring, told reporters that he would be willing to freeze property taxes. “We can definitely put a lid on property tax increases or contain their growth to a reasonable manner, if that is what the DFL is concerned about,” he said.

And he disputed that property tax increases were out of line. “That we’re balancing the state’s budget on the backs of the property tax isn’t actually accurate,” Pawlenty said. “You look at the total statewide property tax levies for the last two years, it’s a little above 6 percent increases and that is not abnormally high, if you go back and look at an historical average over 10 to 20 years.”

But Entenza said Wednesday that the trend is increasing faster, because of Republican policies.

“While I’m pleased that Bemidji is doing better than most other communities, the reality is that this only keeps the wolf at bay for a short amount of time,” he said. “The danger is that next year we’ll see property taxes begin to lurch up, as the governor increasingly pushes school finance on the backs of property taxpayers and away from state aid.”

The DFL will author a supplemental education funding bill next year tied to property tax relief, Entenza said, even though next year is thought to be taken up mostly by a state buildings construction bonding bill.

“We are ahead of forecast in money coming into the budget, so it is appropriate for us to do some supplemental things, and we believe property tax relief needs to be near the top,” he said. “It gives us a little bit of a cushion, and my hope would be that we could at least get some one-time reductions in property taxes.”