Two key DFLers on local property tax issues have offered legislation to reinstate the market value homestead credit that was eliminated as part of the shutdown-ending budget deal reached this past summer.
DFL Reps. Ann Lenczewski and Paul Marquart said Tuesday they have pre-filed the legislation ahead of the 2012 session and are actively seeking co-authors on both sides of the aisle. The measure doesn’t include a mechanism to pay for reinstating the roughly $500 million credit, but both lawmakers said they’d be open to a bipartisan solution to recoup the spending. The changes, if adopted, would not apply until 2013.
“We think, across the state, more and more people…are really going to start getting angrier and angrier,” Lenczewski said at a Capitol news conference Tuesday. “This is the only state aid in the property tax system that suburban residents get.”
“It’s gone, and we’re asking bipartisanly all legislatiors to join us and bring back the homestead credit,” she added.
The news conference comes two days before a deadline for local governments to set preliminary property tax levies for the coming budget year. That data is due to be submitted by Thursday, Sept. 15, and because of that timeline, the DFLers said, many local officials and residents are just beginning to wrestle with the effects of the homestead credit’s elimination.
“This is an issue that’s been a sleeper and residents are now hearing about this,” Marquart said. “We’re now starting to realize, councilmembers, citizens, what this means.”
Lenczewski and Marquart both cited their frequent appeals to Republicans during the regular legislative session to avoid enacting policies that they said would ultimately lead to higher local taxes. Phasing out the homestead credit, they said Tuesday, amounts to a $538 million tax increase. The phase out did come with additional tax relief for homeowners through an exclusion, but some have said that – and the changes to the credit more broadly – will lead to higher taxes elsewhere anyway.
“The exclusion is a delusion,” Lenczewski said. “At best it’s an illusion.”
Tuesday’s news conference is the latest push from DFLers at the Capitol to connect local tax changes to policies pushed and enacted by Republican majorities and Gov. Mark Dayton as part of the budget deal that ended the state’s historic government shutdown. Republicans, for their part, have repeatedly said local taxes amount to a local decision, and that the exclusion will help offset the cost to homeowners.
Last week, DFLers began a tour to link increasing local school district levies and shrinking K-12 budgets to the Republicans and the heightened shift that was part of July’s budget deal. A near-record 133 school districts are already planning on asking for more through local levies this fall, with the final deadline for planning those initiatives scheduled for Friday.