Eden Prairie and Southern Minnetonka Democrats
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News Archives

Senate District 42

Democrats Clean Up at Fall Adopt a Highway Event

Dems_clean_upOn Sunday, October 13, Democrats from Eden Prairie and Minnetonka met to help keep our communities beautiful by cleaning a 4-mile section of I-494. Hope you can join us for the Spring clean up.  Look for more information here.

3rd Annual Fall Feast a Success!

Fall_FeastSunday, September 23, brought not only beautiful weather, it brought a great turn-out for our annual Fall Feast. We were able to bring together a strong group of candidates for people to talk with and hear from. To see more. visit our Photos page.

 

 

Congratulations to Our DFL Volunteers of the Year

Congratulations to our two SD42 DFL members who were winners of Party Officer and Volunteers of the Year awards at the recent DFL State Central Committee Business Meeting:

  • Kay Lewis was the CD3 winner as Party Officer of the Year for her efforts at the Edina CD3 Office during the 2006 election cycle
  • Reade Bailey was the CD3 winner of Volunteer of the Year for his work at the Congressional and Senate District levels during the 2006 election cycle.

SD42 Dems at the Second Annual Fall Feast.SD42 Dems came together for the Second Annual Fall Feast

On Saturday, November 18, over 70 Democrats from across our senate district came together at the Preserve Barn for the second annual DFL SD42 Fall Feast. They enjoyed good food, music and a chance to catch up with each other now that the 2006 election is behind us.

Minnesota

Sen. Amy Klobuchar Gives April 21 Radio Address

Senate Klobuchar devliered this week's Democratic Radio Address, calling for America to send a clear message that we will not stay in Iraq indefinitely. As the Iraq Study Group recommended, we must begin redeploying our troops and begin a surge in diplomacy, economy and Iraqi responsibility.  Visit this website for a link to her complete remarks.

2007 DFL Tax and Education Proposals:

Restoring fairness, investing in Minnesota's Quality of Life

So far this session, Senate Democrats have provided $24 million in tax relief through a federal conformity bill and $376 million in property tax relief for homeowners statewide. This is money that will go directly to taxpayers through increased tax refunds, reduced local property taxes and improved local services and schools.

However, the media has chosen to focus on the effects of the Education Investment Bill creating “the highest tax rate in the nation.”  Here are some points to help communicate the rationale for a renewed investment in Minnesota’s quality of life:

Upper-income Minnesotans are not paying their fair share in taxes:

The 2007 Tax Incidence Study done by Minnesota Department of Revenue (non-partisan) shows lower- and middle-class Minnesotans pay a larger share of income in taxes than the top 5% of income earners in the state, meaning we have a regressive tax system.

Effective Tax Rate means ratio of taxes to income

  • Minnesotans are paying less of their income in state and local taxes today than they were 10 years ago:
    • - 1996 average Effective Tax Rate 1996: 12.7%
    • - 2007 average Effective Tax Rate: 10.9%
  • In 2004, Minnesotans paid an average of 11.6% of their incomes in state and local taxes. But the 1% of Minnesotans with the highest incomes (over $354,758 a year) paid only 9.6% of their income in taxes.  
  • The study predicts this regressive trend will continue at least through 2009, with the tax system becoming slightly more regressive each year.
    • By 2009, the average Effective Tax Rate is projected to be 11.7%
    • The highest Effective Tax Rates of between 12-12.6% will fall on middle-class taxpayers with incomes between $35,544 and $129,879.
    • The Effective Tax Rate on the top 5% of earners –incomes over $181,754 – is projected to be 10.4%, a full 2% below the rate on middle-income Minnesotans.
  • By increasing the tax rate on Minnesota’s highest income earners, we are restoring fairness to Minnesota’s tax system. We ask those who have benefited most from the tax cuts imposed during the past several years to chip in.
  • The new investments funded by a fourth-tier tax rate will allow schools and local governments to take the pressure off property taxpayers throughout the state.
  • Only 93,000 Minnesotans are expected to see an income tax increase as a result of the Education Investment Bill. Many of these same people, along with hundreds of thousands of other Minnesotans, will see reduced property taxes, improved local services and better-funded schools.

Link to the 2007 Tax Incidence Study: 07_incidence_report

The Tax Picture: Business vs. Homeowner:

This information is from the Department of Revenue’s non-partisan “Recent Trends in Property Taxes” presentation:

  • Taxes on small businesses are expected to go up 2.5% in 2009 as a result of tax increases included the Senate Tax Bill. Without the Senate Tax Bill, homeowner property taxes are projected to increase 6-10% (non-partisan House Research).
  • From 2002-2006, property taxes on residential homes in Minnesota increased an average of 12.3% per year. Taxes on business property increased an average of 2.9% each year during that same period.
  • Between 2002 and 2006, homeowners’ share of total state property taxes increased 7%.
  • In contrast, the percentage of local property taxes collected from business property decreased by 6.4%.

You get what you pay for:

Minnesota is ranked between 5th and 7th, depending on the source, in the nation in income taxes paid per capita. Even with this “high tax” ranking, Minnesota has performed near the top of the nation in nearly every quality-of-life indicator.

According to Richard Sims’ presentation from the Sierra Institute for Applied Economics:

MINNESOTA - rankings

Income taxes paid per capita: 5th – 7th (depends on source)

K-12 education spending per capita, 1995-2003: 8th             

Personal income growth per capita, 1995-2003: 7th

  • 4.5%, or 0.5% above the national average

TENNESSEE – rankings

Income taxes paid per capita: 43rd

K-12 education spending per capita, 1995-2003: 48th

Personal income growth, 1995-2003: 36th

     
  • 3.9%, or 0.2% below the national average and 0.7% below Minnesota’s growth rate

Positive business initiatives included in the Senate Tax Bill:

  • The Chamber’s of Commerce top 2 session priorities are included in the Senate Tax Bill:
    • $20 million for the acceleration to a single-sales factor, moving the phase-in from 2014 to 2011
    • $121 million for an up-front exemption on capital equipment, especially beneficial for small businesses
  • $78 million for education levy buy-downs and $444 million in new education investments (Who benefits more from an educated workforce than the state’s business community?)

Permanent Property Tax Relief in Senate tax and education bills:

  • $376 million in the Tax Bill and another $110 million in the Education Investment Bill, all for permanent property tax relief
  • $149 million increase in direct property tax relief to homeowners
  • $78 million for buying down local school levies
  • $150 million for Local Government Aid, returning to 2003 funding levels.
  • $60 million for County Program Aid
  • $12 million for Township Aid
  • $24.4 million increase in the Property Tax Refund Program
  • $41.9 million increase in the homestead market value credit
  • $9 million increase in the agricultural land market value credit
  • Resulting in a projected 5.8% statewide property tax reduction in 2009

What this means in terms of actual property tax reductions for selected income levels:

Home value:          Current tax:      Senate proposed tax:      Change amount

$150,000                $1,429                   $1,341                    $89 tax cut (6.2%)

$250,000                $2,630                   $2,521                    $109 tax cut (4.1%)

What this means in terms of property tax refund amounts for selected income levels:

Home value      Income      Senate proposed tax:   New refund:  Change:

$150,000         $40,000           $1,341                  $387            $30 refund incr.

$250,000       $60,000         $2,630              $694         $53 refund incr.

Tax Truths

The Minnesota Department of Revenue released an important study in March, 2007, that confirms what DFLers have known for some time —taxes in Minnesota target the middle class. The structure of local and state taxes favors the wealthy and businesses and hurts regular Minnesotans.

We Minnesotans expect services at a basic level from our government — and we're willing to pay for those services.

These facts are vitally important for Minnesotans to understand as the lines are drawn at the legislature and budget proposals start to take shape.  Here's some of what that report had to say:

Gov. Pawlenty's tax policies have caused the tax burdening Minnesota to disproportionately target the middle class.

  • It's only common sense that each citizen should pay his or here fair share of taxes.
  • It's high time Minnesota returned to the fair system of taxation we lived with prior to the recent changes to the state tax code.
  • By 2009, Minnesotans who make $34,000 to $52,000 a year will pay 12.5% of their income in total state and local taxes.
  • Minnesotans making over $1,000,000 a year — the richest 1% — will pay 8.9% of their income in total state and local taxes.
  • These percentages don't factor in the billions of dollars in new and increased regressive* fees that have skyrocketed under the Pawlenty "no new taxes" policy.

The supposed $2 billion budget surplus doesn't exist.

  • It's time for honest budgeting in Minnesota. We have to do it in our homes, the government should have to do it at the State Capitol.
  • Gov. Pawlenty and many Republicans in the legislature have claimed the state has a $2 billion surplus — this information just isn't true.
  • Due to budget gimmicks and one-time shifts, the budget presented by Gov. Pawlenty doesn't represent reality.
  • There is virtually no "new money" available in the budget — certainly not enough to cover inflation and continue the current level of basic government services.

The cost of government for everyone has increased during Gov. Pawlenty's tenure.

  • One of the most regressive taxes of all — property taxes — has skyrocketed in the last 4 years
  • It's time for the state to stop soaking Minnesotans with these regressive taxes
  • We need comprehensive property tax relief that we'll actually feel in our pocketbooks

Senate approves major property tax relief package:  $376 million package includes increases in state aid, property tax refunds

Minnesota State Senators followed up on a session priority today, approving a $376 million property tax relief package in the Senate Property Tax Division to be included in the Tax Omnibus Bill later this month.

“The increase in property taxes over the past four years has been staggering and unacceptable,” said Property Tax Division Chair Senator Rod Skoe (DFL-Clearbrook). “On the first day of this legislative session, we announced that delivering meaningful property tax relief for homeowners would be a top priority. This bill accomplishes that goal. It gives direct tax relief to those who need it most – homeowners. And it restores the commitment the state made to fund local governments, allowing them to stabilize their budgets and stem future property tax increases.”

Sen. Skoe and Tax Committee Chair Senator Tom Bakk (DFL-Cook) formulated the proposal, which fulfills the priorities outlined in the Property Tax Relief Act announced on the first day of the 2007 legislative session. State aid to cities, counties and townships is increased, as is funding for the Homeowners’ Property Tax Refund Program, and residential and agricultural land market value credits. Sen. Skoe said restoring the partnership between the state government and local governments will help deliver the balance needed to get the state back on track.

“If you look at history, property taxes really started spiraling out of control after the legislature cut Local Government Aid in 2003,” Sen. Skoe said. “Our committee has spent two months hearing from cities and counties that can prove when state aids are reduced, property taxes go up. This bill fully funds LGA at 2003 levels and provides an inflationary adjustment, giving cities, counties and townships the budgetary balance they need to get their communities. This is the long-term piece of the tax bill that will certainly prevent double-digit property tax increases in the future.”

The Property Tax Relief package includes:

  • $150 million for Local Government Aid, returning to 2003 funding levels

  • $60 million for County Program Aid

  • $15 million for Township Aid

  • $24.4 million increase in the Property Tax Refund Program

  • $41.9 million increase in the homestead market value credit

  • $9 million increase in the agricultural land market value credit

  • $75 million for state takeover of school levies

Senate Research estimates project that the new infusion of dollars into the Homeowner Property Tax Refund Program will allow a family with a household income of $70,000 to receive a $746 refund, $62 more than under current law. Minnesota homeowners with homes valued at $200,000 would see an average 4.9% reduction in their net property tax bills through aids and credits included in this bill, paying about $99 less than they are today.

“This bill truly provides widespread property tax relief to homeowners in every corner of Minnesota,” Sen. Bakk said.

Trouble for Governor Pawlenty's Budget:  A structural imbalance and under funded reserves jeopardize Minnesota financial health

The Governor's budget is not in structural balance in 2010, once inflation is budget imbalancefactored in. The situation could become even worse in 2011 if Congress does not allow the scheduled expiration of the capital gains tax cut to take effect.

The Council on Economic Advisors advises the State Economist and the Department of Finance on its budget forecast. For several years, the Council has recommended that the state set aside 5% of its biannual projected spending in a reserve to mitigate the effects of unforeseen economic downturns. The Council also recommends including inflation in the forecast.

* regressive fees and taxes that take a larger percentage of income from a lower income person than from a higher income person