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Maplewood City Council Policy & Politics


Taxes Up But Revenues Down

Anyone who owns a home or other real estate in Minnesota probably has noticed that property taxes have skyrocketed in the past decade. Minnesota 2020 has just put out a paper analyzing the trend in more detail. Researcher Jeff Van Wychen looks at property taxes in real terms (adjusting for inflation) on a per capita basis. The numbers show what we've all felt in our wallets: property taxes have shot up in real terms since 2002, and homestead property taxes even moreso.

But here's a surprising fact that goes with it: "While the average Minnesota homestead property tax has increased by 30 percent from 2002 to 2009, per capita county, city, and township revenue has fallen." In other words, even while charging more in property taxes to their residents, local governments have had less money with which to pay for the services those residents need.

The reason is simple enough -- funding from the state has been slashed. (Funny how the mandates from the state, which require local governments to spend money on various things, have not vanished as well.) The paper concludes, "Since 2002, the rapid growth in property taxes in general and homestead property taxes in particular is primarily the result of state policies, not local spending decisions."

For years now, the state of Minnesota has patched up the holes in its budget with duct tape billed to local government. Our governor, with aspirations for higher office, clings to his campaign promise never to increase taxes, while forcing local governments to do just that time and again, even while cutting their operating budgets. As bad as this is, it has utterly failed to address the underlying structural issues of the state budget for the coming years. The state can't milk local government units forever -- as more cities, like Maplewood, no longer have any state money to be taken back. While they have any to lose, this will mean even bigger future cuts for the cities that do get any Local Government Aid/Market Value Homestead Credit.


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