I have read the sections on this blog, and this is what I have gleaned from the information. Is this a fair condensation?
The property taxes in Minnesota are inequitable as they are currently applied to taxpayers. Ability to pay is totally disregarded. If you look at the amount of property taxes paid as a percent of income, there is a large disparity between taxpayers. For example, there are some homestead property owners that pay as low as 1% and others pay in the 25% range. This is inequitable and particularly for those on fixed incomes. When your income becomes fixed, your property taxes continue to rise. For some homeowners, the taxes become so high they are in danger of losing their homes.
There is a solution to this inequity. If each homeowner paid a “fair share” of property taxes based on their income, the problem of people being taxed out of their homes would be corrected.
There are twenty taxing districts in the state. You can see this by clicking on the Department of Revenue link at the top of this page. Let’s take a look at one of the taxing districts and examine how things are now and how they could be made “fair”. The Arrowhead Region has total revenue of $118,596,419 from property taxes. The “average burden” column shows taxpayer’s burden as 1.84%. This means that if you take the average burden (1.84%) times the total income for the taxing district (6,435,380,140), you get the total revenue of $118,596,419. You can use this same calculation for each taxing district.
If each homeowner in the Arrowhead Region paid their “fair share” of 1.84% of their income for property taxes, the total revenue would still be $118,596,419. Therefore, instead of some paying only 1 or 2% and others paying 20 or 25%, the taxes would be a fair burden for everyone based on their income. People on fixed incomes would not be in danger of losing their homes..
Do your own exercise at home to see where you stand on the property tax fairness ladder. First take your taxable income for MN and multiply it by the average percent property tax burden for your district. That will give you your FAIR share of the property tax amount. Then take out your property tax statement and compare it to your fair share. If your property taxes are higher than your fair share, you will get a refund and if your property taxes are lower than your fair share, you will have to pay more.
