Do you remember the summer of 1999?.

Tuesday, November 09, 1999

Do you remember the summer of 1999?

That was the summer when Minnesotans received the largest income tax cut in state history.

That was also the summer when the largest tax rebate in Minnesota history was returned to citizens in the form of a check in the mail.

For Minnesotans, it didn’t get any better than that.

Now, State Rep. Greg Davids (R-Preston) says more of the same could come next year.

When the 2000 Legislative Session begins in February, Davids said the legislature will likely look at additional tax relief record.

"Surplus tax revenue are already piling up," said Davids. "Next session, lawmakers will be looking at such things as eliminating Minnesota’s ‘sick’ tax, cutting state sales taxes, reducing our tab fees and, perhaps most significant, advancing property tax reform."

Davids said three main factors determine the level of property taxes: (1) the amount of money that local governments – towns, cities, counties and school districts – decide to spend to provide services to the community; (2) the classification of your property (how it is used), which determines the property’s class rate; and (3) the estimated market value of your property, or the amount the assessor estimates a buyer would pay for your property if it were up for sale.

Over the last few years, Davids said the Legislature has addressed each of the areas in an effort to lower property taxes.

The most noticeable example of property tax relief to the average citizen was probably the property tax rebates the Legislature passed a couple years ago. Most of the permanent rate reductions, however, have been in the area of commercial, industrial and agricultural property.

"Minnesota’s business taxes are still among the highest in the nation and that includes big companies in the Twin Cites to shops on Main Street in rural Minnesota," Davids said. "At the same time, homeowner taxes have not been held down."

During summer, the Minnesota Department of Revenue sponsored a 17-member "jury" of citizens to study the state’s property tax system and recommend changes to make it simpler and fairer.

In its initial report, the Citizens Jury recommended that cities, counties and school districts rely more on service fees, state income taxes and state sales taxes and less on property tax revenue; they argued that the improvements homeowners make to their property should be exempt from valuation increases until the property is sold, and they suggested cutting the number of classes and subclasses of property.

"That’s a decent starting point for discussion in the tax committee," Davids said.

Now through December, the Department is holding town hall meetings throughout the state on the issue of property tax reform.

Mower County area meetings will be held Nov. 16 in Rochester from noon to 2 p.m. at Rochester Community and Technical College, and 5-7 p.m. at Southwest Technical College in Winona.

Davids said the Governor has indicated that he would like to make a tax reform recommendation to the Legislature by the 2001 Session.

In the meantime, members of the House of Representatives will continue to work at providing tax relief for property owners, vowed Davids.

Last session, the legislature passed $70 million in property tax relief for family farmers. The overall tax bill contained $140 million in property tax reductions. And although it can change, by law, 60 percent of any projected budget surplus this year must go toward property tax reform.

"You’ll likely see many efforts to reduce property tax rates again," Davids said