Tax Fight Takes Shape at Minn. Capitol

The Pawlenty administration has suggested capping the amount levies could rise a proposal that has gone nowhere in recent years.

Einess and others at the Capitol would prefer putting money into programs taxpayers can access directly. The state's current programs provide refunds to homeowners of up to $1,750 with the actual amount depending on household income. A special refund program can net filers as much as $1,000 more in cases where their property taxes go up by more than 12 percent in one year.

"When the state government is going to do relief, we like it as targeted as possible based on the ability to pay," said Bob DeBoer, an analyst for the Citizens League, a St. Paul-based public policy think tank. "That's how you can directly make sure people aren't being forced out of their homes."

Even if property taxes for homeowners fell under the Senate bill, owners of other property would pay more. Taxes on business and utility land would go up by $29 million in 2010 and $53 million in 2011.

And the bill does away with Pawlenty's Job Opportunity Building Zone program that gives tax breaks to businesses that expand or relocate in distressed areas. Companies enrolled in JOBZ by May 1 would remain eligible for the breaks but no new companies would be allowed in after that.

Bakk's committee plans to act on the bill Thursday. A vote by the full Senate is expected next week.

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Brian Bakst can be reached at bbakst(at)ap.org