We have often advocated for a fresh start on the state's complex and convoluted property tax system. Over the years it has been adjusted, tweaked and amended beyond all recognition. We've long thought it is time to chuck it all out and start anew.
Unfortunately, Gov. Mark Dayton's tax proposal, with a $500 annual, one-size-fits-all rebate for property owners, doesn't fix much of anything. It simply mollifies the property tax payers with a rebate that could result in lower-value property tax payers receiving more in refunds and rebates than their actual tax bill, while doing relatively little for owners of higher priced property.
It does nothing to reduce the number of property tax classifications, which at the current 55 nearly equals Heinz's "57 Varieties." That may be a great motto for food products, but not for a system of taxation.
In 2010 the Minnesota Legislature created the state Property Tax Working Group, which over the next two years examined the property tax system, listened to problems and complaints, and came up with a consensus plan to simplify and revamp the property tax system, issuing its final report last November. Lawmakers should take a close look at this 55-page report and make use of its recommendations to create a new property tax system. Among other things, it reduces the classifications from 55, all taxed at different rates, to four, expands the property tax refund program to do away the various credits, and does away with limits, caps and freezes, allowing local government to be accountable to the local taxpayers.
The property tax system has gotten away from its main purpose, to provide local support for local government services. It's time the state moved it back in that direction.