Reality Check: Behind The Price Hike Of Property Taxes

MINNEAPOLIS (WCCO) — Got your property tax bill yet?

Get ready for some sticker shock.

Many people will be surprised when they see just how much they’ll have to shell out.

Here’s why:

It used to be Minnesota homeowners could lower their property tax bills with something called the homestead credit.

Now it’s gone.

“I am often asked, does that automatically increase property taxes?,” said Rep. Greg Davids, R-Preston, the chairman of the House Taxes Committee. “And the answer is no. Could it? Yes, it could.”

That’s TRUE.

Ninety-five percent of Minnesota homeowners filed for the old homestead credit in past years, cutting their property tax bills by up to several hundred dollars.

It’s been replaced by the Market Value Exclusion.

That allows homeowners to exempt part of the value of their home from taxes. But it won’t necessarily lower your bill.


It all happened in the crisis atmosphere of last summer’s 21-day government shutdown.

A budget deal passed by Republicans, and signed into law by the Democratic Governor.

Signing the budget bills, which fixed the $5 billion budget shortfall, Minnesota Gov. Mark Dayton signaled his unhappiness.

“I’m not entirely happy with this budget that I have signed into law,” said Dayton, a first-term Democrat. “It’s not what I wanted, but it is the best option that is available.”


The state was supposed to fully reimburse cities for the homestead credit, but it rarely kept that promise. Cutting the $500 million homestead credit program was meant to eliminate the obligation, and balance the budget.

Now cities are turning to homeowners to make up for lost revenue.

Amid all the confusion about the new property tax system, homeowners are left holding the bill — literally.

Meanwhile, the outcry over property tax hikes grows, Minnesota Republican leaders said this week they will push for tax relief — next year.

Here are some of the sources we used for this Reality Check

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