Business Owners Face Soaring Local & State Property Tax Bills

BUSINESS OWNERS FACE SOARING
LOCAL AND STATE PROPERTY TAX BILLS …UP A COMBINED 8% STATEWIDE IN 2009
As Property Taxes Climb Across the State, Business Owners Already Contribute More Than Their Fair Share Business owners and tenants pay 31% of total property taxes collected on just 13% of statewide market value. “What governors and citizens alike need most is a growing economy that is creating jobs for the people and sending revenue to the capitol. Over the long run, the only way to have a healthy and growing economy is… to trust the people with their
own money, and create an environment where initiative and enterprise are rewarded rather than penalized.” ~ William McGurn writing for the Wall Street Journal …YET Minnesota business owners will still pay almost $3 per $100 of market value, while homeowners will pay just $1 for the same market value. Residential Homestead Commercial & Industrial Estimated
Market Value Local Property Tax Estimated Market Value State & Local Property Tax Source: House Research and Fiscal Analysis Departments Effective Tax Rates—taxes payable as a % of market value— have fallen for all Minnesota properties since the 2001 reforms… 30.6% 13.0% 46.7% 57.7% IN 2009 MINNESOTA’S EMPLOYERS WILL AGAIN BE TAXED TWICE ON THE PROPERTY THEY OWN OR OCCUPY FIRST, by their local city, county and school district
AND A SECOND TIME, by the State of Minnesota with a special tax paid only by owners and tenants of business properties, cabin owners and utilities— set to increase by 6.1%, for a combined increase of 8% statewide in 2009. *Levy automatically increases each year by the percentage increase in the implicit price defl ator (a measure of the level of price change in the U.S. economy). The levy was initially set at $592 million for taxes payable in 2002 and is estimated at $774 million for taxes payable in 2009. THE STATEWIDE GENERAL PROPERTY TAX RATE IS CALCULATED IN ALMOST THE SAME WAY AS OTHER UNITS OF GOVERNMENT CALCULATE THEIR PROPERTY TAX RATES. Local Units of Government Property Tax Calculation Statewide General Property Tax Calculation The STATEWIDE GENERAL PROPERTY TAX will raise $774 million in 2009—in addition to the property taxes those same business owners will pay to local jurisdictions. The STATEWIDE GENERAL ROPERTY TAX is set to increase by 6.1% in 2009, for a total increase in cost to employers of
$182 million or more than 30%, just since its fi rst payable year, 2002. For more information or additional copies, please contact Kaye Rakow, NAIOP Director of Public Policy, (952) 928-7461
PAYABLE MONEY RAISED BY YEAR THE STATEWIDE GENERAL PROPERTY TAX LEVY
2002 $592.0 (millions) 2003 595.0 2004 615.0 2005 625.0 2006 655.0 2007 693.0 2008 29.0
2009 (Estimate only) 774.0 Source: House Research and House Fiscal Analysis Departments
2009 Rate Increase 6.1% 30% Increase Since 2002