In response to School taxes: everyone loses
but the state,
it is important to make clear that MSRPO does support local schools. What we do not support is inaccurate or misleading statements presented as fact.
The school tax for non-resident owners was not “split into two parts” in 2001. In 2001, in the days of budget surplus, there was a massive overhaul of Minnesota’s property tax system. Formulas for how the state funds local school districts and municipalities were changed, income tax was rolled back, and every
property class received reduction. The state sought to increase its commitment to school districts, thereby reducing the burden on local property tax payers.
Seasonal property received the smallest reduction of any class. Thereason was a new tax – the state business tax, which applies to commercial, industrial and inexplicably cabins and hunting lands. The tax amounts to about a $40 million subsidy of business property tax in the state yearly.
At the same time seasonal property, because they cannot vote in local elections, were removed only
from excess operating levies. These levies are typically short term, used to plug temporary budget holes. Seasonal owners pay all other school taxes, including capital improvements, the biggest levies.
Budget deficits began almost immediately in 2002. Minnesota has not raised any taxes to cover these deficits, but has pushed the problem onto the property tax. As a result, property taxes, particularly on Seasonal, have been going through the roof. Local excess school operating levies have become more frequent and larger as the state commitment to districts has dwindled.
In 2008, MSRPO testified in tax committee on a bill that would have put Seasonal back on excess operating levies and taken cabin owners off the state business tax. We did not oppose the bill, but were skeptical. Education funding should not be reliant on excess operating referendums.
Thestate has not made good on its funding obligations, creating a difficult position for school districts—a dependence on operating levies to stay afloat. This climate has also caused finger pointing. Mr. Stuart points his finger at seasonal property owners, which is unfair, and provides no real solutions.
We have been advocating for a complete state and local fiscal system overhaul to solve the education funding problem. In 2009, the MSRPO Board endorsed a plan written by past Commissioner of Revenue John James called Finding a Way Forward
– see www. msrpo.org.
MSRPO has worked to bring common sense to the administration of Minnesota school trust lands—lands set aside to provide revenue for local schools. These lands are managed by the MN DNR and have not
been returning any significant income to schools.
Good management of these lands would yield significant dollars to local school districts and reduce property tax pressure on local land owners. MSRPO worked with legislators to amend several bills to establish a dedicated lands analyst to manage school trust lands effectively. Bills have not been passed, but will likely see more action next session.
MSRPO encourages people to contribute directly to their local schools. We applaud David Stuart’s efforts, even if we take exception to his mangling of the facts. But we also encourage you to work towards solutions like a complete overhaul of our state and local fiscal system. We must change the way our school trust lands are managed.
Jeff Forester
MN Seasonal Recreation
Property Owners Coalition
Leave a Reply