Property Tax Proposal Introduced in House

By Janet Kubat Willette, Agri News

ST. PAUL — Property taxes were the centerpiece discussion of the Farmers Union's annual lobby day.

Granite Falls farmer Tim Velde came prepared. He compiled the data for his property taxes from 2009 to now. During that time, his property taxes increased by 398 percent, from $9 per acre to $35 per acre. At the same time, his property's market value increased 277 percent.

If his taxes had only went up 277 percent, it would have saved him $10 per acre, he said.

With corn prices hovering at about half of their 2012 record high and closer to cost of production, farmers are more concerned about having the money to cover rising property taxes, said Minnesota Farmers Union vice president Gary Wertish.

Higher property taxes also drive up rental rates, said Joe Arnold, an aspiring farmer and president of the Lac Qui Parle Valley FFA chapter. Arnold joined MFU members for their Capitol visit.

Velde talked property taxes with every legislator he visited, even House Speaker Paul Thissen. Thissen spoke at the Agri-Growth policy luncheon on March 25 and Velde approached him afterward to share his numbers.

Thissen said the first tax bill focused on repealing business-to-business taxes, including the farm equipment repair tax, while the second bill will focus on property taxes.

Rep. Paul Marquart, DFL-Dilworth, has legislation that will provide $18.5 million in agricultural property tax relief in 2014 and $15 million beginning in 2015.

"We think it's very important that we provide this property tax relief to farmers," Marquart said.

Thissen said the proposal will help 75,000 farmland owners across the state.

The House proposal enhances the existing market value homestead credit, Marquart said. The way it works for 2014is if a property qualifies for homestead credit, the property taxpayer will receive a homestead credit of $230. This check will come from the state as it is too late to make adjustments on property tax statements that were received by taxpayers last week.

Going forward, the maximum credit increases to $490 on agricultural homestead property valued at $260,000 or more.

Both Marquart and Thissen are optimistic this property tax language will advance to conference committee with the Senate.

On a related tax issue, Thissen said the farm equipment repair tax will cease being collected on April 1. Taxes paid since it went into effect last year will not be reimbursed to those who paid the tax, he said.

Thissen said other legislative priorities yet to accomplish this session include:

• Establishing a Greater Minnesota Rural Development Fund, a small business revolving loan fund ran on a regional basis. Funding would go to the initiative foundations throughout the state. The proposal is to send $1 million to each foundation.

• Innovation vouchers. These vouchers would go to small businesses to help them hire a consultant for business planning services. These grants would be administered out of the Department of Employment and Economic Development.

• Expanding broadband. The House proposal is to target $25 million into expanding broadband into unserved and underserved areas of the state.

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