State Revenue Increase Better Than Property Tax Increases
(St. Paul, MN)– Local chambers of commerce from across the state gathered Monday for a State Capitol press conference to explain that local government aid is critical to business growth and livable communities throughout the state and that the governor and legislature must come together to produce a budget compromise that includes both cuts and a state revenue increase.
The group said that the disproportionate cuts to LGA over the past years have driven up property taxes 65% across the state since 2002, with greater Minnesota taking the biggest hits.
“We already know what a tax increase looks like. It looks like this - a property tax statement - which our businesses and families have been slapped with year after year because of the continued cuts to LGA, and we’ve had enough of that,” said Dan Dorman, a former Republican state representative and current executive director of the Albert Lea Economic Development Agency.
“It is time for some good old fashioned Minnesota common sense. Both sides need to do what majority of Minnesotan’s want. They want the Legislature and the governor to sit down and work out a solution that isn’t going to rely entirely on cuts and property tax increases” Dorman said, citing a poll in Sunday’s Star and Tribune in which 63% of respondents said they support a combination of higher taxes and service reductions to address the state’s $5 billion budget deficit.
The coalition of Chambers that gathered for the news conference all acknowledged that the decisions facing the governor and legislature are difficult, with no easy solutions, but said the time had come that state policymakers stop passing the buck by forcing the local units of government to increase property taxes.
“Property taxes are hammering businesses, especially small businesses. Maintaining LGA is critical to business growth and job creation in Minnesota,” said Randy Kehr, the executive director of the Albert Lea-Freeborn County Chamber of Commerce.
“Property taxes make up the largest share of taxes that businesses pay and those property taxes have steadily increased over the last decade, particularly in greater Minnesota.” Kehr cited Minnesota House Research Property Tax data showing that while from 2002 to 2010 commercial and industrial property taxes have increased 44% in the Metro area, they have increased by 70 % in greater Minnesota.
“As the executive director of an economic development agency for a mid-sized city on the Iowa border, I can tell you the worst direction for this state to take is cutting LGA, which drives up property taxes on businesses and leads to cuts in city services. If we want to attract businesses, we need livable communities where employees want to raise their families,” explained Dan Dorman.
“This isn’t just about balancing the state budget this year, this is about how we will keep our communities strong for our kids, our young families and our businesses for the next 20 to 30 years. It can’t be done through spending cuts and property tax increases alone,” said Dorman. “A compromise must include both cuts and an increase in state revenues.”