Minnesota SenateMinnesota House of Representatives
State Capitol100 Rev. Dr. Martin Luther King Jr. Blvd.St. Paul, Minnesota 55155
Sen. D. Scott Dibble
Rep. Frank Hornstein
Rep. Marion Greene
November 8, 2011Dear neighbor,
If you’re a homeowner paying the second half of your property tax bill this month, pay special
attention to your statement. Many of you should notice a line called the Homestead Credit, adirect property tax relief program that lowers homeowner property taxes. Any home valuedunder about $414,000 automatically receives the credit. The maximum credit is $304 and theaverage credit is $202. Ninety-five percent of all homeowners receive this benefit.
We’d like all residents to take notice of this special property tax relief now because next year, theHomestead Credit no longer will exist. The state budget “fix” that Republicans insisted
on andvoted for during the July special session
and which the three of us voted against
included anirresponsible decision to eliminate the Homestead Credit, meaning the property tax reduction
you see on this year’s statements disappear next year.
The Republicans replaced the Homestead Credit with a new scheme that will require cities and
counties to factor a lower percentage of homeowners’ total market value when applying levies.This “new” program provides $0 in property tax relief, eliminating a p
rogram that provided $538million in relief; it only shifts which property tax payers bear the burden
expected to be homesthat have increased or maintained their values, residential rental properties and commercialspaces that are increasing in value.Probably most upsetting is that unlike the old system, there is no guarantee that this new so-called Homestead Market Value Exclusion will result in lower property taxes for even onehomeowner because the deduction no longer is applied directly to individual tax bills. Instead,many homeowners
and business owners, commercial property owners, renters and owners of highly valued homes
will see an increase in their tax bills next year as cities and counties areforced to spread their levies across more properties to make up for the artificially lowered taxbase.