The Free Press, Mankato, MN

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December 19, 2011

In Response - Don’t blame Legislature for property taxes

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This letter is in answer to the accusations made by the Mankato Free Press Editorial Board in their Nov. 22 edition about the “Republican-led Legislature” and the loss of the Market Value Homestead Credit.



The fact is local government organizations supported this change. In the Sept. 23 Echo Press, the executive director of the League of Minnesota Cities, along with the Association of Minnesota Counties, stated they supported the changes.



To use their words, they “decided it was time to eliminate the recurring shell game and support elimination of the Market Value Homestead Credit program. This position was driven by a desire for more transparency and fiscal certainty.”



I agree.



During the 2011 legislative session, we had to plug a $5 billion hole in our budget.



One program we looked at was the Market Value Homestead Credit. Although spreadsheets reflect a reduction of $261 million, the actual amount we have sent out to cities and counties over the last 2 years has been around $90 million through reductions by the previous Legislature. And this is where the rub comes in between the local governments, this newspaper, and myself. We can’t be looking at money promised when figuring out this problem, but money actually received.



The last two years, the previous Legislature promised the city of Mankato $640,285 and $659,008 in Market Value Credit (MVC) respectively. However, this is not what they received. They received a grand total of $0 for both years.



All three Mankato Democratic politicians can verify this since all three voted yes on those bills, which the governor signed.



Mankato is not receiving a dime less in MVC aid for 2012 than they did this year.



However, Mankato now plans, in my opinion, to not only levy back for money they never received, but to in fact increase their spending above that!



The story for Blue Earth County is similar. They were promised one number but received another, in this case being shorted around $600,000 in MVC aid. Again, this was in the bill all three Democrat politicians voted for and the governor signed. The county’s plan, in my opinion, is to levy back the $600,000 they never received, plus an additional amount of spending on top of that by increasing their levy.



We took several steps regarding the market value program during this last session.



We passed, and the governor vetoed a bill to give local governments the same aid as last year. We passed, and the governor vetoed a bill to reduce and phase out the statewide property tax on commercial/industrial properties. We are committed towards direct tax relief to the payers.



Please remember, there were counties and cities across the state that saw this coming. They knew they were not going to get the promised aid, planned accordingly and actually cut their levy to get to a zero increase in taxes. One can make the argument that the state failed to give the planned funding. But when you know that you are not going to get that amount, then spend that amount anyway, then levy it back and blame it on the state?



Well, that argument loses its validity. My advice to local leaders is to look at what’s happening in Washington D.C. and overseas and realize that we are in a very fragile and precarious position. Think very hard before giving grants to organizations, building paved trails or buying land. This could get worse!



Rep. Tony Cornish R- Good Thunder

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