A report by the nonpartisan House Research Department shows that the elimination of the Market Value Homestead Credit has caused property taxes to rise precipitously across the state, hitting outstate landowners especially hard.

Per Peterson of the Marshall Independent notes that “elimination of the MVHC increased property taxes statewide by $413 million, with an average property tax increase of 5.2 percent; the average agricultural property tax increase is 11.9 percent; the average apartment property tax increase is eight percent; and the average small business property tax increase is 7.4 percent.”

The report also said the average rural Minnesota property tax increase is 8.7 percent, almost three times more than the average Metro total; the average residential homestead property taxpayer in Greater Minnesota saw an increase of 5.2 percent; and the average Greater Minnesota business property tax increase has an impact of almost two-and-a-half times more than a Metro business.”

Peterson puts some perspective into the tax credit report. “The MVHC was created by the Legislature as a way to provide direct property tax relief. Eventually, however, the state stopped reimbursing local governments for the property tax relief they were providing on behalf of the state. Rep. Lyle Koenen, DFL-Clara City, said because the state hadn’t been paying against the credit in the first place, majority Republicans in the Legislature decided to do away with it. Rep. Chris Swedzinski, R-Ghent, said ‘when we had conversations with cities and counties (last year) the biggest issue was they never knew what was going to come their way. Nine out of the last 10 years the state did not meet its obligation for the program.’”

So, to recap, the state didn’t meet its spending obligations, so it cut the credit and property taxes went up.

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