If this bill passes, it would be a true ‘Minnesota Miracle’
April 8th, 2008 – 5:07 PM by Dennis J. McGrathA bill that would give Minnesota voters the chance to abolish property taxes is scheduled for a hearing Wednesday.
Sponsored by Rep. Chris DeLaForest, R-Andover, the bill would place a state constitutional amendment on the November ballot that, if approved by voters, would eliminate all property taxes in Minnesota.
Here’s the pitch DeLaForest made for his bill in a press release today:
“The Legislature has been nibbling around the edges of the property tax problem for many years,” said DeLaForest. “It is time to be bold and to confront this problem head on.”
Rep. DeLaForest explained doing this would require some very fundamental questions be asked. Is property tax the best way to collect money? Or are there better ways? DeLaForest pointed to hundreds of emails he has received during his time in the Legislature from people who earn low incomes, or those who are on fixed incomes. Property taxes are a hold over from an agrarian society, he explained, which we no longer live in.
“Our society is rapidly aging. Retirees are often reliant on a fixed income,” DeLaForest stated. “It is very frustrating for them to have to pay higher property taxes when their income is not increasing.”
In 1971, the Legislature and then-Gov. Wendell Anderson enacted a massive overhaul of the property tax and the state’s revenue structure — an initiative that became known as the Minnesota Miracle.
If DeLaForest’s bill passes, it not only would be a more sweeping change than the Minnesota Miracle, but it would be a true miracle indeed. Legislators will have a tough enough time plugging their own $935 million budget deficit, let alone creating a permanent $5 billion-plus gap in funding for local governments throughout the state.
Still, like winning the lottery, it’s fun to dream about.
Here’s the full text of the bill, H.F. 3632.
It will be given a hearing Wednesday in the House Taxes Committee at 10 a.m. in Room 10, State Office Building.
2 Responses to "If this bill passes, it would be a true ‘Minnesota Miracle’"
As a progressive, I welcome any and all discussions about tax fairness and reform. Yes, the property tax is a hold over from the agrarian age. As we enter the post industrial age we have to keep rethinking how and what is taxed.
This is not a bad bill at all.
Scotty B, nice comment.
When running for the state house, I proposed similar cuts, also to the tune of $5 Billion, but instead of fully abolishing property taxes, I only exempted the first $250,000 of primary residential property (pegged to inflation so that your regular house would not have property tax liability, but rental property you own or your super rich person mansion would pay taxes on value over that level).
That would have cost about 3 Billion, in 2005-2006. I also intended to cut sales taxes down to size, capping total sales taxes on any purchase at 2 or 3 %. That would have cost an additional 2 billion.
My plan to pay for those cuts was to increase the income tax in the neighborhood of $9 billion, which would also have provided enough funding to 1) insure every Minnesotan under a medicare style state-run insurance program, 2) provided early childhood and post secondary education for every minnesotan from age 3-23 and 3) invest in transportation infrastructure for the 21st century.
Of course, I only won 5% of the vote, but then again, I didn’t have a party.
The biggest problem with abolishing a whole mode of taxation, such as property or sales taxes, or as the GOP would like to do, income taxes, is that a variety of forms of taxes is like a diverse stock portfolio.
When certain economic sectors go down, corresponding tax collections go down, but often the other tax collections will go up. A steady stream of revenue is important because otherwise you end up with deficits, during which programs are cut, and surpluses, during which rebate checks are issued.
But I love the spirit of this bill. Hopefully the tax committee will consider it and keep the good parts in mind for meaningful tax reform once governor Tax-The-Poor and only fund GOP projects has been run out of office.