Roseville State Sen. John Marty Blasts GOP Plan To Phase Out Business Property Tax

Submitted by the office of Sen. John Marty:

State Sen. John Marty, DFL-Roseville, the lead Democrat on the Senate Taxes Committee, issued the following statement today (Tuesday) in response to the Republican proposal to phase out the state-wide business property tax:

“Today’s Republican tax proposal ignores the reality facing Minnesota homeowners and renters.  Last year’s Republican budget led to sharp increases in property taxes across the state. 

Rather than raising even a dollar in income taxes on the wealthiest Minnesotans, the Republican leadership chose to eliminate the Homestead Credit, cut the rent credit, and deeply cut aid to cities and counties.
 
Unfortunately, today’s Republican proposal does nothing to alleviate those big property tax increases hitting people who are struggling in the recession. It will reduce, and ultimately eliminate, business property taxes while doing exactly zero to help homeowners and renters. And with the state facing a $4 billion deficit next year, this legislation will make the deficit worse.
 
Calling this a “jobs” bill is nothing more than political spin. The Republican proposal is not tied to job creation in any way. It is simply a business tax cut to all businesses. Eliminating property taxes for Wal-Mart might increase the bottom line at their corporate headquarters in Arkansas, but it won’t put Minnesotans back to work.”

Meanwhile, Marty's office highlighted these points about Minnesota's property taxes and business climate: 

• From 2002-2012, residential homestead property taxes went up by 94.2 percent, while business property taxes increased by 54.6 percent. (Department of Revenue)
• According to non-partisan House Research, the elimination of the Market Value Homestead Credit last session resulted in a $413 million property tax increase this year, including a 7.4 percent property tax increase on small businesses. (http://www.house.leg.state.mn.us/hrd/issinfo/csim12A3.pdf)
• In 2011, the Council on State Taxation (COST) released their ninth annual study of state and local business taxes (http://www.cost.org/Page.aspx?id=69654). The report, prepared by Ernst & Young LLP, measures state and local business taxes that actually were collected against economic output (private-sector gross state product). The Ernst & Young report calls this measure the "total effective business tax rate."

By this measure, the “total effective business tax rate” (including both state and local taxes) in Minnesota is 4.4 percent. That is well-below the U.S. average of 5 percent. Only 12 states had a lower “total effective business tax rate” than Minnesota in 2010.