St. Paul, MN – State Representative Terry Morrow joined his colleagues on both sides of the aisle on Monday to pass legislation that offers relief to thousands of homeowners whose property taxes are high relative to their income. Statewide property taxes increased by 59.1% between 2002 and 2008 (a $2.7 billion increase).

“I consistently hear that property taxes are causing deep concern,” said Morrow. “This is especially true of seniors and others on a fixed income, families, and farmers. It’s time to create a fair system that considers a person’s ability to pay and which works to let people stay in their homes.”

The plan creates a new Homestead Credit State Refund, which kicks in for 95% of all homeowners. The bill directs help to homeowners with incomes under $200,000 and whose property taxes exceed 2% of their income. Between 89-98% of Minnesota’s 1.5 million homeowners are expected to be income eligible for the Homestead Credit State Refund.

“This is property tax relief without a tax increase,” said Morrow. “We help Minnesotans who need it the most.”

To see how your property taxes would be affected under the proposal, check out the Property Tax Calculator on the House web page at

http://www.house.leg.state.mn.us/hrd/issinfo/hmvccalc5a.xls

“I encourage homeowners to try the property tax calculator to see how the property tax relief benefits them,” said Morrow. “If we do nothing, property taxes will increase again next year for 1.5 million Minnesota property owners. The Governor asked for direct relief to homeowners without raising taxes. This bill meets his requirements, which raises the expectation that he will sign it into law,” stated Representative Morrow.

The bill includes additional new funding for cities, counties and townships. Local government aid is another important factor in property taxes. The intent of LGA is to enable all communities to provide essential services; otherwise, some communities might not be able to afford police, fire, emergency and other services. This bill, by increasing LGA, means that our cities won’t be pressed to raise property taxes to pay for the same things.

If this legislation becomes law, the city of St. Peter will receive an additional $374 thousand in LGA in 2009, and North Mankato will receive just over $100 thousand. Throughout district 23A, cities and counties receive enhanced LGA funding from the tax bill (amounts are the increase above the certified 2008 LGA if the bill is enacted):

Mankato: $300,000

Courtland: $2,000

North Mankato: $60,000

Gaylord: $54,000

Le Center: $156,000

Le Sueur: $42,000

Cleveland: $6,000

Lake Crystal: $33,000

St. Peter: $520,000

Waseca: $300,000

Winthrop: $20,000

Good Thunder: $6,000

Two provisions authored by Rep. Morrow were included in the final bill, authorization for a local sales tax for North Mankato. The people of North Mankato approved this proposal in November 2006. In this vote, close to 68% of voters chose to raise the North Mankato sales tax by 1/2 percent to pay for local projects. These projects include expansion of the Taylor library, road work along Highway 14, riverfront development, and more. The tax is limited to these projects and ends when the projects are completed. State law requires state approval of a local option sales tax. The City of North Mankato asked Representative Morrow to bring forward the necessary enacting legislation, which he did in 2007.