Five consecutive years of double-digit property tax increases prompted the 2007 Legislature to pursue significant property tax reform last session.  The House and Senate passed four separate property tax relief bills.  The first one to reach the governor's desk included $452 million in permanent property tax relief, delivered by increasing funding to the Property Tax Refund Program for homeowners and renters and buying down education levies statewide.  The governor vetoed that bill.  The final tax bill provided $377 million in permanent property tax relief through homeowner aids and credits, and more state aid to local governments.  Gov. Tim Pawlenty vetoed the bipartisan bill after the session adjourned. 

“These property tax figures refute the governor’s notion that he solved the state’s budget deficits without raising taxes,” said Senate Tax Chair Tom Bakk, DFL-Cook.  “Clearly, property taxes have gone up significantly due to his vetoes and cuts to police and fire aid for communities.  We’ve tried, and will continue to try, to provide real property tax relief to Minnesotans despite the governor’s unwillingness to cut property taxes.”

Sen. Bakk said a big reason for the increase is lack of adequate funding for education at the state level.  In response to staggering property tax rates in 2001, the state took over $1.8 billion worth of education levies across the state.  That move reduced the state’s total certified levies from $1.93 billion in 2001 to $986 million by 2002 and greatly reduced property taxes.

Since 2002, Gov. Tim Pawlenty has refused to live up to the state’s education funding promises, causing local districts to once again rely on property tax payers to meet funding requirements.  As a result, the state’s total certified levies will reach $1.93 billion again by 2009—the same total facing the state before the levy buybacks in 2001.

“Any net benefit Minnesotans realized on their property tax statements after 2001 will have disappeared by 2009,” Sen. Bakk said.  “We made a promise to help districts keep local property taxes low, but this governor hasn’t been interested in living up to that promise.  Now we’re right back where we started, with enormous property tax rates and struggling school budgets.”

“This study demonstrates again that if we don't adequately fund education, health care and transportation on the state level, homeowners and property owners get stuck with the bill,” Rep Jim Davnie added.  “We're seeing skyrocketing health care costs and record high prices for gas, heating fuel and food.  Homeowners are simply being priced out of their homes and rents continue going up.  If we’re looking for ways to revive our economy and help Minnesotans, this must be part of the solution.”