Editorial: Rising property taxes not due to overspending
Turns out local government isn’t such a spendthrift after all.
It’s been popular sport in recent years, especially by the governor’s office, state auditor’s office and some House Republicans, to beat up on cities, counties and school districts for raising property tax levies.
But a study released recently by the non-partisan League of Rural Voters refutes these claims.
“We’ve heard more than one politician claim that higher property taxes are the result of excessive spending by schools and local governments, but the facts do not support this position,” says Niel Ritchie, LRV executive director.
The League of Rural Voters property tax study shows higher property taxes are a direct result of state cuts to cities, schools and counties. Statewide, residential property taxes rose an average 58 percent between 2002 and 2006, nearly three times the 21 percent average gain in personal income during that same period, according to a recent analysis by the Minneapolis Star Tribune.
You can blame three changes in state tax law for your aching wallet.
In 2001, the Legislature reduced taxes on commercial property. Nice for business. But the property tax base is like a water balloon — when it gets pushed down for one group, it bulges out onto another, in this case — ta da! Homeowners.
Also in 2001, the state decided to pick up school costs, but then froze aid to schools the following years — forcing school districts bring out the budget ax or go back to local taxes.
And city residents felt the pain during the state budget crisis of 2003, when deep cuts were made to the local government aid program, which provide state funds to cities for property tax relief.
Using the same four-year period, LRV says state aid to school districts has been cut by $709 million, a 9.9 percent decline, and Local Government Aid to cities was cut 30.9 percent.
So much for the “local government spendthrifts” theory. Property taxes have grown almost entirely due to cities and school districts replacing state aid cuts — not because of free spending local officials.
School property taxes have increased by $443 million or 38 percent statewide, and statewide city property taxes are up by 35 percent, LRV said.
But even with higher property taxes, local government has been bringing in less money: Revenues have declined in real dollars per capita by 5 percent.
Counties are doing even worse: Total revenue to counties during the four years dropped nearly 10 percent, even as the state has shifted more costs to counties.
For example, short-term felony offenders are housed in county jails, rather than state prisons, at county expense.
And counties now have to pick up 10 percent of Medical Assistance costs for extended nursing home stays for people under 65.
Fortunately, the tax base in Becker County and Detroit Lakes has been seeing healthy growth the past few years, with new development growing the size of the tax pie that must be divided.
But the regressive property tax is still hurting a lot of people, and it’s time for the Legislature to quit pushing the blame downhill and do something about this wobbly third leg on the state tax stool.
© Copyright 2006 DL Online - Detroit Lakes Tribune | October 18, 2006
