Omnibus Bill Cuts $160 Million From Renters' Credit

Dear neighbors,

The Omnibus Tax bill (HF 2337) was recently heard in the House Tax Committee. The bill raises taxes on Minnesota renters, including seniors and the disabled, by cutting an additional $160 million over two years from the Renters’ Credit program to pay for property tax relief to corporations.

The Renters’ Credit is a property tax refund program that helps about 300,000 Minnesotan households. It refunds part of the property taxes that renters pay via rent payments to landlords; HF 2337 reduces the refund.

Over 25 percent of those who receive refunds are seniors and people with disabilities. Many live on fixed incomes and use their refund to buy medicine and groceries. Just last year the Renters’ Credit was slashed by $26 million and resulted in nearly 300,000 Minnesota households seeing an $87 cut on average per refund and almost 7,300 households losing the refund entirely.

This proposal means another 74,000 households would lose their entire property tax refund, about 1 in 4 participants. Those still receiving the credit would lose $213 on average, which would be a hardship for seniors living on a fixed income, college students paying tuition or anyone who lives paycheck to paycheck.

A more balanced alternative to providing property tax relief that doesn’t pit property owners against each other is needed. I have co-authored a bill to restore a revised Homestead Credit, which is a much better way to achieve some property tax relief. This Homestead Credit bill requires the state to pay the refund, removing a bad state practice in recent years that placed the responsibility to pay the refund onto county and city governments. Unfortunately, our bill has not been scheduled for a hearing.

In summary, the 44-year old Homestead Credit provided direct relief to 95 percent of homeowners. It was a targeted credit that showed up automatically on property tax statements and its removal led to substantial property taxes hikes for homeowners, businesses, farmers and renters alike. The Homestead Credit ought to be restored to provide relief to all property owners.

As session continues to move along, I welcome your input and advice on these or any other legislative issues important to you. Thank you again for the honor of serving you in the legislature.

Sincerely,

John Benson

State Representative

District 43B