Assistant Senate Majority Leader Taryl Clark, DFL-St. Cloud, today claimed that for the first time, collections from the property tax will be greater than collections from the income tax.
Is this true?
We turn to veteran political calculator Mike Mulcahy.
This does appear to be true if you're talking individual income taxes. House research made this handy chart.
But there are also some caveats. It looks like income tax collections took a big drop because of the recession. Handy chart here on page 3
Also worth noting that the property tax figures include the statewide property tax on businesses but the individual income tax totals do not include the corporate tax, which raises $792 million this year...a little more than the statewide business property tax.
Also not sure if it's fair to say this is the first time ever. The state had no individual income tax before 1933.
Update 5:33 p.m. (From Mulcahy)
According to information Tom Scheck just got from the Revenue Department, the state collected more in property taxes than income taxes from 1962 to 1978 (the year of the Minnesota Miracle) and fiscal years 91-96. (The records they gave us only go back to '62). It also looks like there were a few years in the early 1980s when property tax revenues where higher than income taxes (that may have been due to the recession then, but it's a little hard to read their chart).
You can quibble on technicalities, but the point is made.
How we pay for our society is changing. The members of society reaping the benefits are progressively paying smaller and smaller shares of the cost.
This just makes the point that local governments are spending too much!
"The members of society reaping the benefits are progressively paying smaller and smaller shares of the cost"
What members are paying smaller and smaller shares????
Name one person paying less in dollars to taxes today than before? And I mean total taxes, not just income.
Oh "BJ" that's silly. The cost of everything has gone up, including taxes. The only thing that's not going up is wages.
Property owners gained wealth as the value of their homes increased. Average home value increased roughly $55,000 from 1999 to today (that's in the current market not the highs from 2-3 years ago). That is a 50% increase. Property taxes have gone up 63% in the same time.
The increase in ratio of property tax to income tax may relate to increasing numbers of home owners rather than increasing taxes.
Kennedy, that's the case in my neck of the woods. The increase in total property taxes collected has less to do with the amount of tax per home and more to do with the increased number of homes.
When I first moved to my city, I think the annual property tax bill was around $1,900. I believe this year it's something around $2,600, including some levies that we approved etc.
That's only a 37% increase over 16 years (and we don't get LGA).
Of course, that's a two-edged sword now because the housing glut has led to a financial problem in the city that didn't account for no expansion in real estate property.