Marlowe Hamerston: Let's place some limits on property taxes

School referendums are over. Some passed and some did not. An article in the Star Tribune on election eve was headlined: "School votes rest in older hands." That seemed to lay the groundwork for blaming seniors for any failure that may have been forthcoming in the elections.

This article, and the Star Tribune's editorial on school funding, missed the point. The objection many have is not the amount needed to fund schools -- it is the manner in which the money is collected. The market-value property tax system is an antique from the 1800s, a time when the more property one owned, the more crops one could raise and thereby the more income one could earn. The society in which this was applicable is in the past. The system of funding local government and schools this way needs to be replaced by one that fits our 21st-century society.

There is a limit to the percentage of one's income that can be taken by the income tax. There is limit to the percentage of a purchase price that can be taken by the sales tax. There is a fixed limit of 20 cents of tax for each gallon of gasoline purchased.

Minnesota's property tax has no such limit.

According to the 2007 Department of Revenue Tax Incidence Study, the bottom 10 percent of income earners ($32,471 and under) pay, on average, 2.73 percent of their incomes in property taxes to support local government and schools -- relatively speaking, six times the share paid by the top 10 percent of income earners ($700,501 and over), who support these services with only 0.41 percent of their incomes.

A 2007 survey by the Minnesota Senior Federation found that some seniors pay 20 percent or more of their incomes in property taxes even after participating in all of the state rebate programs available to them. At the same time, the top 1 percent of income earners paid, on average, 0.04 percent of their incomes to support local government. Such senior citizens are paying a share 500 times greater to support local government than Minnesota's most-affluent citizens are.

Is it any wonder there is opposition to this horrendous system of taxation? It inflicts the greatest financial harm to those with the least ability to pay -- whether because of relentless increases in assessed market value or because of additional taxation from levies. Minnesotans on fixed incomes cannot be asked to increase their funding to schools and local government by 10 to 20 percent every year.

Before local government and schools ask for more funding, Minnesota must reform the manner of collecting these funds so that the system is fair. There must be a limit placed on what a Minnesotan can be required to contribute to schools and local government. If additional funding is necessary, let the entity that is constitutionally responsible for providing the children of our state an education -- the state government -- do its job. School boards will not solve our referendum problem. It is the responsibility of the Legislature to make the system fair. The first step is to create a limit to property taxation, and to do so in the 2008 session.

Marlowe Hamerston, of Shoreview, is chairman of the Minnesota Senior Federation Tax Committee.

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