PoliGraph: Dayton’s property tax claim in range

In an effort to help Gov. Mark Dayton and Republican lawmakers overcome their budget stalemate, a group of six budget experts have suggested a temporary 4 percent income tax increase on all Minnesotans.

Dayton wants to raise income taxes on the state’s highest earners to close the budget gap – but not on everyone else.

Property taxes are the reason, he said in a press release responding to the plan.

“Most other Minnesotans are already over-taxed, due primarily to the 75 percent increase in property taxes statewide during the previous eight years.”

Dayton’s claim is largely accurate.

The Evidence

There are two ways to measure how much property taxes increased over the last eight years.

First, there are local property taxes. They’re used to support schools and other local services. In calendar year 2002, property tax revenue amounted to roughly $4.02 billion. In calendar year 2010, local property taxes came in around $7.12 billion.

That’s an increase of 77 percent.

If you factor in the property taxes the state collects, which are imposed on businesses and recreational homes, revenue in 2002 was about $4.6 billion. In 2010, property taxes came in at 7.88 billion, amounting to a 71 percent increase – less, but still in range.

As an aside, local property tax increases are an indirect product of decisions made in the Capitol. When state aid declines, as it did during former Gov. Tim Pawlenty’s administration, it’s city and county officials, not the governor or the Legislature, who decide how much to increase property taxes to continue supporting local services.

The Verdict

All together, property taxes have increased 71 percent over the last eight years. Dayton’s off by a few percentage points, but he’s basically correct.

SOURCES

Gov. Mark Dayton, Governor Dayton’s statement on recommendations from budget committee, July 7, 2011

MPR News, Mondale/Carlson Commission: Tax cigs, alcohol and income, July 7, 2011

Minnesota Department of Revenue, Price of Government, March 2011

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