Kurt:
I agree that in general property taxes are not the best, but the only thing
the law allows cities to use. Because the Central Business District pays
such a large amount of Property taxes, Minneapolis home owners are not
overwhelmed by the need to provide the services a central city must provide
to the region. So this factor makes it somewhat more fair.
Personally, I think a steep personal income tax on money made in
Minneapolis and hotel taxes would capture needed revenue from those who
actually use the services.
Dean Zimmermann
Commissioner District 3
Mpls Park and Recreation Board
Candidate for Mpls City Council, Ward 6
612-722-8768
[EMAIL PROTECTED]
-----Original Message-----
From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED]]On Behalf Of
Kurt Waltenbaugh
Sent: Thursday, May 31, 2001 6:36 AM
To: Dean Zimmermann
Cc: [EMAIL PROTECTED]
Subject: RE: [Mpls] Mpls property taxes
Dean,
I'm no expert on taxation, and probably have some misconceptions about how
it all works.
Yet, perhaps the reduction is an attempt to remove the reliance on Property
Tax as a primary way to support the budget. As taxes go up, the only way
one can "afford to pay" the burden is to sell one's home. Income (ability
to pay) does not increase with the assessed value and taxation rate of ones
home.
Example: a friend of mine has owned his home since 1952, raised a family and
buried his wife while living in that house. He is now on a fixed income.
In the last decade, not only has the tax rate climbed dramatically, but the
assessed value of his house has more than doubled - and according to the
computer "model" our friendly assessors use, it may soon triple! The only
options he has to pay those taxes is to sell the house or take on renters.
How is this fair, no matter what the assessed value?
Or take another case, where a young family buys a house in a transitional
neighborhood and begins renovation, putting "sweat equity" into the
property. As the value of the house improves, as the neighborhood improves
in value, their taxes soon reach a point where the equity they've put in out
weigh their ability to pay for the increased taxes. (The "this old house"
Property Tax Exclusion program notwithstanding).
How fair is this?
I would like to see a moratorium on assessment increases - the valuation of
the house should only change when the property is sold. This would give
homeowners incentive to improve their space, and continue to reside in the
house. It would give people an incentive to retire and continue to live in
and anchor the city, rather than move out to the suburbs or elsewhere.
Let's end the double taxation increases of rate and assessment. The
government will still get the increase eventually, it just needs to plan a
bit better and wait for the property to be sold.
And remember that the median home price in the Metro Area is well above
$135,000 these days
(http://www.startribune.com/st/qview.cgi?template=sports_a&slug=coas25), up
from less than $100,000 in the late 1980's. That means that the vast
majority of homes are valued well above the $76,000 level.
KtW>
-------------------------------------
Kurt Waltenbaugh
ECCO, Ward 10
[EMAIL PROTECTED]
-----Original Message-----
From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED]]On Behalf Of
Dean Zimmermann
Sent: Thursday, May 31, 2001 1:51 AM
To: Mpls Issures Mpls Issues
Subject: [Mpls] Mpls property taxes
David Brauer started out this discussion on property taxes with this short
message:
"I'm curious how the property tax deal cut between the governor and
legislative leaders affects Minneapolis finances. Reports characterize the
deal as "lowering & flattening" property tax rates - particularly for
apartments and businesses, but also a dramatic cut for higher-valued homes.
Currently, homeowners pay 1 percent of assessed value up to $76,000, and
1.65 percent of assessed value over that. In the new deal, everyone pays 1
percent up to $500,000 and 1.25 percent above that.
My question: if the rates are property tax rates are sliced, and the city
treasury relies quite a bit on property taxes, doesn't this the city
treasury takes a big hit? Perhaps the city's property tax slice is
independent of the doings at the capitol. Can someone in the know explain
how it all fits together?"
The answer to his question is "Yes, the city treasury takes a big hit."
This so-called tax reform is a poorly disguised shift from those who can
afford to pay to those who can not, but most importantly, it will shift the
burden from the rich suburbs and downtown to the home owners of the core
cities and the inner ring suburbs. The next two paragraphs are an email
exchange I was forwarded between an inner ring mayor and a former Mpls
senior budget official..
"Have you been following the property tax reform legislation? I believe
it is a sellout. Residential property, particularly in the Cities and first
ring suburbs are going to have a very difficult time maintaining their level
of services. Our present system was a partnership, business paid to assure
housing, schools and strong communities in return for an excellent work
force. This system is not cheap but it has produced excellent results for
both citizen and business. Now that we are globilized we are less sensitive
to the community and a lot more sensitive to global profit. We must protect
this partnership."
"The system that was in place did just what you
outlined. In addition, the tax capacity system incented a mixed use city
through the higher taxes for rental and commercial properties. The
revisions all favor outer ring suburbs and the inner ring and core cities
are taking a big hit. Wait until you see the impact on TIF with the
reduction in the school levies. I am not a fan of TIF, but the reality is
this also hits the inner ring and core cities harder."
So my questions are
1) Why are our local legislators not exposing this to the
public?"
2) How are we going to run this city when this tax reform
drastically cuts
into our city revenues?
3) Who can explain the details of this new tax reform
clearly and
succinctly so that we get a handle o what is going on?
4) What will be the impact on the Mpls School district and
the Mpls Park
Board?
5) Does the Governor understand how seriously this impacts
the core cities
and how blatantly it lines the pockets of those who
already are blessed
with plenty of money?
6) Does the mayor know what is going on?
Dean Zimmermann
Commissioner District 3
Mpls Park and Recreation Board
Candidate for Mpls City Council, Ward 6
612-722-8768
[EMAIL PROTECTED]
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