Feeling Minnesota

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As promised, I'm following up on last Friday's post about the tax debate in Minnesota. There's little new to report in the way of faith-based support for the progressive DFL plan supported by State Senator Larry Pogemiller, but there is a bundle of coverage in the Star Tribune.

Here is an article that outlines the debate and the key players, Pogemiller and anti-tax Republican State Rep. Phil Krinkie. Here's a key passage that caught my eye about Krinkie's plan:
The tax bill he has produced contains no major increases in state sales or income taxes. It features deep cuts in a property tax refund program for renters and a "turbocharged truth-in-taxation" measure that gives extra clout to property owners who want to challenge local spending increases. Critics say it's part of an overall budget that's mean-spirited and further diminishes Minnesota's traditionally generous public sector. Krinkie contends that it's responsible and provides a significant increase in revenue in the next budget period.
What gets me here is the way that he pits renters directly against property owners. Often, it seems like the two biggest issues that drive state-level tax reform is education funding and property tax relief. A major challenge for legislators working on reducing the impact of property taxes is to make sure that renters (who generally tilt toward the low- and middle-income end of things, compared to home owners) see some kind of relief. Often, when property taxes are reduced, landlords see all the benefits and don't pass any savings on to their tenants. In Minnesota, they address that issue with a refund program. Reducing that program will make the tax code more regressive--placing more of the burden on people with less income. To further skew matters in favor of the wealthy, Krinkie also is proposing to require ballot referendums among property owners to raise local revenue. That's right, as I understand it, here's how it works (though, I'm a bit late to the story): the town council passes a spending measure. Then property owners get to vote on it. If so much as 20% vote "nea" it fails. That's right. An 80% majority would lose a vote. In any case, so after the property owners vote and 20% say "nea" then a special ballot referendum election must be called so that all the town's voters can have a say. These election would be pretty expensive to run, but the bigger issue is that the Republican budget plan in Minnesota calls for hiking taxes on renters, even while it disenfranchises them from part of the (slighty superfluous, if not gimmicky, proposed) process.

Minnesota Citizens for Tax Justice have done a lot of work explaining the scope of recent cuts and a plan to raise a bit more revenue. They are also working to get the word out about the real face of funding shortages.

One local city manager has connected the dots nationwide, and sees the Pawlenty gimmick as part of a larger web of politicians chickening out in the face of a powerful right-wing advocacy group. The funny thing is, if recent history can act as a guide, it just might be good politics, in addition to policy, to it stick to 'em.

Thank you for visiting Tax Justice Blog. CTJ and ITEP staff will soon retire this domain. But ITEP staff are still blogging! You can find the same level of insight and analysis and select Tax Justice Blog archives at our new blog, http://www.justtaxesblog.org/

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