11/17/11
Check your mail. Hennepin County has started mailing out property tax estimates for 2012.
New this year is the elimination of the Market Value Homestead Credit and its replacement with a valuation exclusion program. This slight of hand was done by our state legislators in another goofy attempt to balance the state budget. The result is that any homeowners that previously received the MVHC credit on their tax bills will not in 2012. The state saves money from not reimbursing the cities for the loss of the tax revenue. Of course, for the past couple of years, the state had not been reimbursing the cities at 100% or in some cases, at all. So the "savings" are somewhat of a sham at the state level.
The exclusion reduces the taxable market value of properties valued at up to just over $400,000, but on a scale with more reductions for lower valued properties. The effect of this ill-conceived exclusion is that there is even more chance that property taxes will be shifted from lower value properties to higher value ones in a city. Hey! It's a new social equity program in the guise of a state tax savings!
As in prior years, your tax bill may go up or down even though the City, County, School District, etc. have made no or small changes in the taxes they levy. In the past, this was usually due to the relation of the change in value of your property in comparison to others in the city. Now, the new exclusion also has an effect.
Shorewood for the past three years and now, again in 2012, is not raising its tax levy. So, don't jump on the City Council if your tax bill goes up and don't praise them if it goes down.
For more information on the new exclusion and the MVHC debacle, see MN Public radio's website and the video they made to explain. It's very good.
http://minnesota.publicradio.org/display/web/2011/10/25/video-property-taxes-increase/
Happy Reading!
The Insider
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