Just the Facts, Ma’am – Property Taxes

The State of Minnesota tried to provide property tax relief by paying local units of government something called the Homestead Market Value Credit, with the hope that the local units of government would then not need to raise as much through property taxes.

Minnesota individual homeowners never received a single dime from the Homestead Market Credit in its ten years of existence — every bit of that money went directly to county and municipal governments.

That is, when the State eventually got around to issuing the credit windfall to those local governments: In nine of the ten years of its existence, local governments never saw a dime, either.

Minnesota State Senator Carla Nelson

Here are some facts about the Homestead Market Credit:

•  The Homestead Market Credit is a tiny fraction of the Rochester city and Olmsted County budgets. Ultimately, only local leaders (meaning: NOT the Governor nor the Minnesota State Legislature) can decide how much to spend and how much to levy taxes on local property owners.
• The Homestead Market Value Credit system was broken. In ten years of its existence, the program only fully reimbursed local governments one time. That is why eliminating the Homestead Market Value Credit was supported by the League of Minnesota Cities, the Association of Minnesota Counties, the Minnesota Inter-County Association, and the Association of Metro Municipalities.
• The funding for the Homestead Market Value Credit was so unreliable that many cities never even counted it in their budgets. Those that did were often left holding the bag for the state’s empty promises.
• The Homestead Market Value Credit, when paid, was property tax relief sent to local governments, not individual taxpayers.
• The 2011 Republican-controlled legislature  reformed the Homestead Market Value Credit, making it a Homestead Market Value Exclusion and paid the property tax relief directly to taxpayers, not to cities and counties.
• Here is what the League of Minnesota Cities said about the conversion to the new system: “…local governments will be better able to make budget and property tax decisions going forward and will be clearly accountable to their taxpayers for those decisions. Ultimately, that’s better for our cities and for local property taxpayers.”

100 percent of every dollar collected in property taxes stays in your local communities.

In contrast, only 66 cents of every dollar collected by the State of Minnesota ever come back to Olmsted County.

Now you know the truth about property taxes.