House DFL property tax relief proposal
One of the lead tax experts in the Minnesota House is proposing legislation that would allow counties to raise their local sales tax to offset any cuts in state aid. DFL Representative Paul Marquart said his plan would allow counties the option of raising their local option sales tax by one half of one percent to continue funding core local services. He said the plan is a better alternative for counties than raising property taxes to recoup any cuts in state aid proposed by Governor Pawlenty:
"If I'm a homeowner and I've lost a job, I have more control over a sales tax that I pay than the property taxes I pay. Property taxes are fixed. Sales tax, I can decide what I want to do by what I purchase."
Voters who oppose the sales tax can choose to stop it by gathering enough signatures to trigger an election on the tax increase. This plan would be in addition to the House DFL budget proposal which would require a $1.5 billion unspecified tax increase. The Revenue Department projects that property taxes will increase $626 million over the next three years if Governor Pawlenty's is approved. The chair of the Senate Taxes Committee said he doesn't like the House proposal because it would benefit some counties greater than others.
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Here's the info from Marquart's office:
Rep. Paul Marquart - County Option Revenue Reform Initiative
Update: Here's a response from Gov. Pawlenty's spokesman Brian McClung:
"Rep. Marquart's property/sales tax plan lacks simplicity, transparency and accountability. It also seems DFLers have a split personality -- they keep saying the tax system should be more progressive while they propose more and more sales tax increases."