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Reality Check: The Truth About Property Taxes

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(credit: CBS) Pat Kessler
Pat Kessler knows Minnesota politics. He's been on the beat long...
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MINNEAPOLIS (WCCO) – Special interest groups can spend the money to say almost whatever they want in a campaign commercial.

And that’s what the liberal-leaning Alliance for a Better Minnesota does.

The problem is that it’s only half true, and it leaves the false impression that Minnesota Republicans raised property taxes on almost every homeowner in the state.
 
“Minnesota families need real solutions,” says a young couple with a child, the first in a series of comments from different people criticizing the GOP-controlled legislature. “But the Republicans in the legislature shut down our government. To protect a tax break for millionaires.”

That’s an EXAGGERATION.

The shutdown came after Republicans refused Governor Dayton’s plan to raise income taxes on millionaires.

But Governor Dayton refused to accept the Republican plan to balance the budget through spending cuts alone.

And the ad blames the GOP for raising property taxes.

“They passed a law making 95 percent of Minnesota homeowners pay higher property taxes,” says a man standing on the porch of a house.

This is highly MISLEADING.

Republicans passed – and Governor Dayton signed into law – a bill eliminating the popular Homestead Credit, which was used by 95% of Minnesota homeowners.

But it was replaced with another program aiming to reduce property taxes for those same homeowners: The Homestead Market Value Exclusion.

Here’s what you NEED TO KNOW:

Many of Minnesota’s 1.3 million homeowners did see property tax hikes averaging 2.4 percent, but many saw a decrease.

The Revenue Department calculates that 69 percent saw tax hikes, but 31 percent got a tax cut.

Of the 1,268,731 Minn. homeowner parcels, there was a decrease of 396,754; 425,222 saw an increase of 0 to 10 percent; and 446,755 saw an increase over 10 percent.

Just last year, a leading Democrat also proposed eliminating the Homestead Credit, and many other popular credits, to lower overall tax rates.

And a similar bill made it through the legislature in 2007 but was vetoed by then-Governor Pawlenty because it also included income tax hikes.

Not a single Democrat voted for it in 2011 when it was proposed by Republicans, even though Governor Dayton signed it into law.

That’s Reality Check.

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

Alliance for a Better Minnesota

ABM Press Release

MN Govt Shutdown

MN Senate Fiscal Analysis of 2011 Tax Bill

Homestead Market Value Exclusion Explainer

MN Revenue Department Property Tax Aids and Credits

MN Statewide Average Effective Residential Homestead Tax Rates

House Dem 2011 Tax Reform Bill

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