One sentence in Sunday's (4/24) Minneapolis Star Tribune editorial on the upcoming State Budget deserves further comment:
The unfairest tax of all, the property tax, has risen painfully in the past decade as state government has pushed its financial trouble onto local backs.
The least fair tax in my book is easily the estate tax, a bare knuckle second bite on income already taxed. It's pure government greed even if it affects relatively few taxpayers and collects very little revenue. But neither I nor most Americans face such prospects so it's not surprising that a new Gallup Poll finds that most Americans indeed like local property taxes least.
The DFL assertion dutifully repeated by the Star Tribune that decreased state money axiomatically must be replaced by local money is a non-sequitur, fiction in terms of law. Trouble is, too many voters believe just that, even though property taxes seem to rise regardless of state aid. But are property taxes truly unfair or simply unpopular?
If I had to name my favorite tax to pay, it would be the city portion of my property taxes. Why? Because I can see where the money goes, like for Police, Fire, Roads, Sewers, Water, Parks, and the Fourth of July fireworks. I in fact serve on my city's Financial Advisory Commission, so I am more than familiar with the city budget. Yes, it goes up but it's also very focused on proper government functions like public safety and the budgeting process itself is straight-forward. (Minneapolis and St. Paul residents: your results may vary!)
The County portion of our property taxes are less focused. The Public School portion, usually the largest, is anything but transparent. But does this explain why taxpayers are so frustrated and the DFL always so ready to offer relief? No, I think it's the variability, the feeling of helplessness that really explains why property taxes are so unpopular. You can't begin to calculate them even year to year like other taxes. You can no longer buy a home and assume you'll be able to afford the property taxes into retirement. And while there's an occasional decrease, when they go up, they go up big.
The big danger for the DFL is that voters might figure out that people like Minneapolis DFL Mayor R. T. Rybak and their Republican-free City Council's might actually be responsible for this mess. Ditto the DFL / Education Minnesota run School Boards. Ditto the DFL strongholds that run most County governments.
Another problem for the DFL is that we property owners actually write checks for property taxes. Even if escrowed within a mortgage, you get multiple mailings a year from the assessor, the county, your mortgage holder, and you see it again when you file your income taxes. Your mortgage paperwork shows what you paid when you bought the property, inviting more uncomfortable questions for the DFL.
I suppose I should wrap up with a recommendation or two, my first to get K-12 education and county welfare out of the property tax business. Property taxes should address property-related services, which can include general government and the courts. And all should then pay them, including non-profit, religious, educational, charitable and inter-government operations. Third, I'd re-do billing and escrow such that you still write the checks every year, separate checks in fact to the city, county, and schools.
