Letter: 'The rest of the story' on Truth-in-Taxation statementsYou should have received your “Truth-In-Taxation” statement in the mail from Nobles County by now. As the great Paul Harvey would say, you need the “rest of the story” as it relates to your property taxes.
By: Craig Clark, City of Worthington Administrator, Worthington Daily Globe
You should have received your “Truth-In-Taxation” statement in the mail from Nobles County by now. As the great Paul Harvey would say, you need the “rest of the story” as it relates to your property taxes.
This year, much discussion has taken place concerning the impact of a state tax policy change that eliminated the Market Value Homestead Credit (MVHC) and replaced it with a Homestead Market Value Exclusion (HMVE). In addition to this change, the legislature made deep cuts to many property tax relief programs including Local Government Aid (LGA). The total loss in state property tax aids and credits was a whopping $636 million.
As a result, a large majority of Greater Minnesota property owners have discovered that their property taxes have increased significantly. Many factors go into calculating a tax bill, but what Worthington residents need to know is that cuts to property tax relief programs by actions in St. Paul have had a real impact on our property tax bottom line that you just received in the mail. The Market Value Credit and Local Government Aid program cuts for Worthington were nearly $530,000 and would translate to a 20 percent increase in our taxes if we would have levied all of it back. The Worthington City Council took the realistic approach in the face of this loss and levied back effectively just 4.3 percent to the general fund. At the same time, the demands for city services continue, and we still need to patrol the streets and plow the snow among other items. A pragmatic approach needed to be taken to cut where we could while protecting our core city services.
We understand the situation the state was in with the deficit, but singling out programs for property tax relief that provided a disproportionate share of the budget solution and then hearing claims that cuts should have no impact on property tax payers fails the truth test. We need honest assessments of the actions in St. Paul, not finger pointing to local governments.
The city of Worthington held its levy to an effective 4.3 percent in an effort to offset some of the state cuts to LGA and other property tax relief. The City of Worthington lowered its operating budget 2.74 percent by eliminating or cutting back on budgeted cost of living increases for employees, not replacing a patrol officer, holding open other staff positions and cutting many other expenditures. The city also has had to put $125,000 of road maintenance on hold for next year.
Greater Minnesota cities are struggling to provide critical services like police and fire protection while holding property taxes down. As you can see by your Truth-in-Taxation statement, when the state cuts more than $630 million in property tax relief, it is raising property taxes on homeowners and businesses. Passing the cuts down to the local level and assuming there would be no impact on property taxes just doesn’t pass the reality test. The city council did what it could to temper the impacts, but there is no easy way to make up for the loss of nearly $530,000 in state property tax relief payments.
Please keep this in mind when reviewing the Truth-in-Taxation statement and make sure when you read it that you are sitting down. The late Paul Harvey would have appreciated doing a story on this issue so that you could get the rest of the story that state cuts to property tax relief programs have a real impact on your Truth-in-Taxation statement. The state of Minnesota cutting over half a million to Worthington wasn’t going to go unnoticed by property tax payers any way you slice it.