Davids: DFL property tax math doesn’t add up

Property taxes increase four times more than lost Market Value Credit funding

ST. PAUL, January 12, 2012 – Minnesota House Tax Committee Chair Greg Davids, R-Preston, issued the following response today to the House DFL’s false property tax claims:

Only Democrats would see the loss of $90 million as the cause for a $400 million tax increase. Their math doesn’t add up and neither does their argument. It looks more to me like they’re exploiting it for politics than they are actually trying to find a solution.  Our solution, as it was during the 2011 legislative session, is to reduce and phaseout the statewide property tax on Commercial/Industrial properties.  Although they opposed it last year, I hope the DFL will now support such a measure if their words are born out of true concern and not just political rhetoric.

Representative Linda Runbeck, R-Circle Pines, Chair of the Property Tax Division, had this to say:

Local governments must be held accountable for their spending.  We eliminated a highly flawed program, an action supported by the League of Minnesota Cities and the Association of Minnesota Counties.  This was an act to allow for more transparency, and starts to shift the paradigm from property tax relief filtered through government to relief provided directly to the tax payer.  I am encouraged by the actions some local governments have taken to increase their efficiencies, whereas the DFL would prefer sending out blank checks.

Simple facts the DFL would like you to ignore:

• The proposed $413 million tax increase is more than four times the amount that cities and counties lost when the MVHC program was replaced. The final MVHC funding was $89 million, it seems highly suspect that losing it would result in a $413 million tax increase.
• In 2010, Representative Ann Lenczewski zeroed out the MVHC reimbursement for many suburbs, including just naming a few: Burnsville, Apple Valley, Inver Grove Heights, Bloomington, Edina, Coon Rapids, Blaine, and Woodbury. Again, this was done in 2010 - when Democrats ran the Legislature.
•  For as much as they claim to care about LGA and the former Market Value Credit, the DFL voted against, and Governor Dayton vetoed, a bill to keep LGA and MVHC reimbursements at the previous year’s levels.  This would have been the same aid amounts Democrats voted and approved when they were chairs.
• The DFL voted against, and Governor Dayton vetoed, a bill reducing and phasing out the Statewide Property Tax on Commercial/Industrial properties.  These properties are taxed once at the local level, and should not be punished twice on the same property by the state.

Their math doesn't add up, they voted against everything and they're attacking Republicans for continuing funding levels Democrats themselves set in place. It begs the question: Do Democrats truly care about property tax relief, or are they simply playing politics?

House Republicans last November released a new property tax relief package aimed at ending the statewide business property tax and providing tax relief directly to homeowners.

House Tax Chairman introduces property tax relief agenda for 2012 session

St. Paul -- Minnesota House Tax Committee chairman Greg David's, R-Preston, today introduced a package of property tax relief initiatives for homeowners and businesses across Minnesota.

"Our property tax relief package is built on the belief that the best property tax relief is given directly to people who pay property taxes: home and business owners," Davids said Monday during a State Capitol press conference. The Davids plan provides an approximately 18 percent cut in the statewide property tax burden for Greater Minnesota commercial/industrial properties, and a 4 percent reduction for metro area commercial/industrial properties.

The 2012 Property Tax Relief Package has two parts, each focusing separately on homeowners and businesses.

The homeowners' portion prioritized homeowners who saw their local property taxes rise by 12 percent or more in Tax Year 2012. For those homeowners, the plan increases the percentage of property taxes the state refunds from the current 60 percent to 90 percent. It also increases the maximum refund available to already eligible homeowners by 20 percent.

"This will provide direct relief to homeowners who were hit especially hard by local property tax increases," Davids said.

The business property tax package is directed toward small businesses to exclude the first $100,000 in the value of commercial/industrial property from the statewide property tax. This would reduce the tax liability of all C/I property, but is structured in a way that benefits small businesses the most.

"This plan would benefit small businesses more than a straight reduction in the statewide rate," Davids said. "The governor vetoed our straight reduction in the 2011 session, so I'm hoping he will consider is this new approach to be more to his liking." The second part of the business property tax relief plan freezes the statewide property tax levy. The plan does not affect local government funding or property tax calculations.

Additional documents:

Highlights

Bringing reality to the DFL spin

Property tax relief under the Davids plan

Governor, please don't quit!

Tax Chair Davids pleads with Governor Dayton to not give up on 2011 Legislative Session

ST. PAUL – Minnesota House Taxes Committee Chairman Greg Davids (R-Preston) said he was disappointed with Governor Dayton’s recent comments about calling a special session.

“Governor Dayton’s a good man, and he’s already shown leadership on several legislative issues this year,” Davids said.  “But as I said in tax committee this morning: Governor, please don’t quit.  Please don’t give up.  17 days is a lifetime, we can make this work.  Please don’t quit.”

Davids said state lawmakers do not share Governor Dayton’s appetite to wave the white flag and be forced into a special session that could waste countless taxpayer dollars.

 

“It is astounding to me that the Governor would rather call a special session than force government to live within its means,” Davids said.  

Davids noted that if government spent only what it collected, spending could increase by nearly $2 billion – or 5.5 percent – without needing to raise taxes.  Yet Dayton said “we won't leave the session with a budget that's $34 billion, we'll leave the session with it unresolved.”

“It is remarkable that the Governor doesn’t believe a $2 billion raise is enough of an increase for state government programs,” Davids said.  “Minnesotans are paying record prices at the pumps, at the supermarket, and for their energy, and yet Governor Dayton still insists on calling for tax hikes.”

Davids also noted that Governor Dayton has not been engaged in the conference committee process and is not sharing his likes and dislikes with the Legislature’s budget proposals.

“The commissioners sit at the hearings, but they don’t say anything because they’ve been told they can’t speak for the Governor,” Davids said.  “We’d prefer to have Governor Dayton give us some input so we can present him bills that he will sign, but to date, he has been unwilling to share his thoughts.”

“On behalf of the people of Minnesota, I encourage Governor Dayton to avoid throwing in the towel.  Growing up in rural Minnesota, I was taught that winners never quit and quitters never win.  Governor Dayton, please don’t quit.”  

Breaking: New information finds Dayton's tax increase proposal would impact ALL Minnesota income levels

Tax Committee will reconvene to discuss recently revealed information

ST. PAUL – Based on new information that Governor Mark Dayton's tax plan will impact many more Minnesotans than the so-called "rich", Minnesota House Tax Committee Chairman Greg Davids (R-Preston) will reconvene the tax committee on Thursday to share and discuss the potential ramifications.

“After reviewing the update to the 2011 Tax Incidence Study, the one thing that stood out was that the Governor’s tax hike plan would increase taxes to Minnesotans on every income level, not just the people he considers rich,” Davids said. 

Davids said the governor’s tax proposal would level Minnesota with the third highest income tax rate in the country.  His tax plan also contains a tax increase on large Minnesota employers and a statewide property tax increase on high valued properties.  

One of the stated goals of the Governor's tax plan is to make Minnesota's tax system more progressive.  Yet Davids noted that when the budget forecast improved, he backed away from his plan to implement the highest income tax rate in the country - a rate only the top 1% of incomes in Minnesota would have paid.  Further, the Governor completely ignored another way to make Minnesota's tax system more progressive - reducing taxes on low-income Minnesotans - something House Republicans did include in their budget.

“It makes you wonder if the Governor proposed these job killing income tax increases because he thought they would make our tax system more progressive, or if he proposed them simply to avoid making a difficult, fiscally responsible decision,” Davids said.  "I wouldn't call raising taxes on hard working, low-income Minnesotans very progressive."

Governor Dayton has continued to advocate for his income tax proposals even though not one state representative voted for his plan when it was brought up for debate on the House floor.

“The Governor put all of his eggs into one basket by taxing our job creators,” Davids said.  “If the Governor is trying to bring more jobs to Minnesota, why does he continue to push for job killing tax increases on Minnesota employers?  The end result will be fewer jobs created and lower wages for workers.”

Davids said the Governor should abandon his attack on hard-working Minnesotans and instead offer real reforms which will control state government spending, return fiscal sanity to our great state and show the world that Minnesota is open for business.

“The Republican-led legislature has not only shown true leadership by proposing nation-leading government reforms, but by providing tax cuts for all Minnesota taxpayers through the income and property tax system,” Davids said. “We opted not to take the easy way and force tax increases on job creators.  Instead our plan makes the tough choices necessary to streamline government for the 21st century and reduces the tax burden on main street businesses across the state.” 

“Our proposals encourage job-growth and expansion by Minnesota companies so we will continue to be on the leading edge of the economic recovery, and we strongly encourage Governor Dayton to follow suit,” Davids concluded.

The House Taxes Committee will discuss the update to the 2011 Tax Incidence Study during its meeting on Thursday, April 7, at 10:15 a.m. in Room 200 of the State Office Building.

Republicans pass first budget bill

Video from yesterday's House floor session when @mnhousegop passed the first budget bill of the 2011 session.

Majority Leader Matt Dean talks about the DFL's effort to help solve the deficit.