Friends,
We learned that, for the first time in a decade, Minnesotans will see their property taxes drop in 2014, thanks in large part to the direct property tax relief passed in 2013 by the legislature.
It’s about time. In 2011, when the Republican-controlled legislature eliminated the Homestead Tax Credit, property taxes statewide increased by a whopping $365 million, or 4.5 percent.
That’s why property tax relief was one of our top priorities in the 2013 session. The DFL Budget provided over $300 million in middle-class property tax relief for Minnesotans through the Homestead Credit Refund, retooled renters’ credit and increased aid to counties, cities and townships.
A analysis released by non-partisan House Research credits the reversal for the $133 million in direct property tax relief for homeowners and renters passed last session through the new Homestead Credit Refund and expanded Renter’s Credit.
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Homeowners will see the most significant decrease. Overall, homeowners will see a $161 million decrease in property taxes in 2014, a 4.9% decrease from 2013.
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Small businesses will see a net property tax decrease in 2014 of 2.1%.
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Renters will see a net decrease in property taxes of 0.1%.
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Non-homestead ag-land will see a property tax increase of 12%. But, notably, market value for ag-land increased by even more – 24%.
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Direct property tax refunds are expected to increase by $133 million in 2014. Nearly 500,000 homeowners and renters will see increased refunds.
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Property taxes are going down despite a significant number of voter-approved education
More than 300,000 homeowners will see a property tax refund increase. More than 100,000 additional homeowners will be eligible for a refund. And the average Minnesotan will see their refund increased by $212.
I encourage you to check if you are eligible for the Homestead Credit Refund or Renter’s Credit. Some of you who may not have been eligible in the past may be eligible this year due to expanded refunds and credits. You can find more information on eligibility and how file for your property tax refund at the Department of Revenue website.
More tax relief
Last Thursday, we passed a tax bill that provides over $500 million in additional tax relief to middle class Minnesotans and small businesses.
One of the reasons we were able to act so quickly is because we learned last month that Minnesota has a $1.2 billion budget surplus. I’m glad that the House acted swiftly to send a big chunk of that back to the people of Minnesota. It’s an investment in making sure our remarkable economic recovery continues.
According to nonpartisan House Research, the bill includes:
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$111 million for middle-income, married families by conforming to federal tax code to eliminate the “Marriage Penalty. More than 650,000 families will see an average tax decrease of $120.
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$36 million for working families by increasing the phase-out range for Working Family Credit to match Earned Income Tax Credit. More than 50,000 working families will see an average decrease of $300.
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$26.4 million for students and parents who are paying for college and students who are paying off loans through education-related provisions, including qualified tuition and related expenses.
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$3.9 million for new homeowners through a deduction for mortgage insurance premiums. More than 80,000 new homeowners will see an average tax cut of $60.
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$7.2 million for homeowners that refinanced or had a short sale.
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$1.8 million for Minnesota families with dependents. More than 25,000 families with household incomes below $38,570 will see a $65 tax decrease.
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$400,000 for families adopting children. Employer-provided adoption assistance is excluded.
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$1.1 million for 60,000 teachers through classroom expense deduction for educators.
About that surplus
The office of Minnesota Management and Budget’s February forecast was great news. For the 2014-15 biennium, the state’s surplus stands at $1.23 billion with a $2.6 structural surplus projected for the 2016-17 biennium. It just goes to show the importance of creating structural sound budgets without gimmicks.
I’m just happy that, after years of budget deficits and shifts, we’ve created a stable budget that puts the state on sound financial footing. This is good news for Minnesota going forward.
The 5% campaign
One of my top priorities this session is my bill to provide a 5 percent rate increase for Home and Community-Based Services (HCBS), which allows older adults and people with disabilities to create the lives they choose and be more independent in their communities. And it helps maintain high quality staff, which increases stability for individuals and improves quality of care. HCBS also saves the state money. It costs up to $32,000 less a year to serve an older adult or a person with a disability using HCBS instead using a nursing facility.
In my opinion, the best argument is that we trust direct support professionals and caregivers to support our families; shouldn't they be able to earn enough to support their own?
No more denying a student a lunch
This week, the House unanimously passed legislation that would ensure all children receive a hot school lunch, regardless of their ability to pay. This bill means the state will now cover the forty-cent disparity between free lunches and reduced-price lunches. It also prohibits a district from charging a lunch fee to a student who is eligible for a free or reduced-price lunch.
A Mid-Minnesota Legal Aid report last month made headlines detailing how many Minnesota school districts turn away kids who cannot afford lunch – the vast majority of whom are those receiving reduced-price lunches.
I introduced the same bill last session, but it was killed by political gamesmanship. It was a good bill last year, and this is a good bill this year. No student should pick up a lunch tray fearing it could be taken away in front of their friends and classmates because their family is too poor to pay for a hot lunch.
Sincerely,
Jerry