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Gov. Mark Dayton and DFL legislators today took credit for a projected $121 million decline in property taxes for 2014. Republicans, however, flatly denied that the local property tax reductions will happen and Dayton conceded that only local elected officials, not state lawmakers, can reduce property taxes with the increased aid they get from the state.

Dayton: Local property taxes will dip by $120 million

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Mark Dayton (Staff photo: Peter Bartz-Gallagher)

Gov. Mark Dayton and DFL legislators took credit Tuesday for a projected $121 million decline in property taxes for 2014. The property tax relief is the anticipated result of the budget Dayton signed in May, which increased aid to local governments and provided tax breaks to those governments as well as homeowners.

Republicans, however, were skeptical that the $121 million property tax drop will happen, and Dayton and his Department of Revenue (DoR) Commissioner Myron Frans conceded that only local elected officials, not state lawmakers, can reduce property taxes with the increased aid they get from the state.

“This is a local decision,” Frans said. “That’s why the beauty of our system in Minnesota is they have the opportunity and responsibility to their local taxpayers to decide how they want to deal with their property tax revenue and their local government aid.”

Frans told reporters at a Capitol news conference that his agency made the projections for the $121 million reduction “based on prior experience of what we’ve seen counties and cities do with this kind of aid.” On Wednesday, DoR will certify to local governments the amount of local government aid (LGA) they will be receiving next year. Cities and counties will then undertake the process of setting their budgets.

Senate Minority Leader David Hann, R-Eden Prairie, agreed that any reduction of property taxes will be the result of local officials’ budget actions this fall. He disagreed, however, that there’s historical evidence to suggest that LGA increases result in property tax reductions. He said he puts as much stock in DoR’s projections as the estimates for electronic pull tabs that are being used to pay for the state’s share of the Minnesota Vikings stadium and have fallen far short of expectations.

“I think his projections on what will happen with property taxes are about as reliable as the e-pull tab projections,” Hann said.

The budget increased LGA by $80 million a year and county program aid by $40 million a year. The homestead credit refund to homeowners was increased by $117 million. The sales tax exemption will save local governments a projected $172 million. If the projections pan out, Frans said 2014 will see the first drop in property taxes since 2002.

Dayton was joined at the press conference by Sen. Kari Dziedzic, DFL-Minneapolis, and Rep. Jim Davnie, DFL-Minneapolis.

About Charley Shaw

One comment

  1. So this state increased all sorts of taxes by 2-3 billion dollars over the next biennium and this is the shell game payback that Dayton and the DFL are crowing about?

    What hutzpah. The DFL needs to be sent to Detroit to experience what will happen to this state as a result of their actions.

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