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Letter: LGA cuts hurt Mom and Pop businesses

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"The (Park Rapids) area is doing the best we can. People are hanging on by a thread. Business is tough. Everyone is feeling pinched...The city can't build parks, can barely keep the streets going."

Last weekend, my DFL House of Representatives colleagues and I put on 660 miles in 38 hours trekking across northern and central Minnesota to listen to area residents' and local leaders' concerns about their property taxes.  When we stopped in Park Rapids, a resort owner (quoted above) told us why state-level cuts to LGA were bad for business.

A small business owner agreed, "These businesses are caught in the middle of an aging infrastructure... Many small business owners in these towns are becoming so frustrated that they have had to sell and get out.  Everyone is working real hard to keep the storefronts open. Small businesses can't continue to be disenfranchised or else little towns will dry up...Mom & Pop business owners have really felt the pressure."

Over the past decade, property taxes have skyrocketed in Minnesota.  We're paying over $3 billion more in property taxes than we were in 2000. 

The burden of property tax increases falls squarely on those of us who are trying to make ends meet - seniors, working families who are trying to get by, and small businesses who operate on tight budgets.

Property taxes are now the largest tax payment that businesses make, comprising 36 percent of the overall taxes that they pay.  Businesses are suffering as a result of property tax increases that are a direct result of LGA ­­­cuts, as we heard time and again in Park Rapids.

Despite efforts by some lawmakers to blame local governments for increasing property taxes, the responsibility falls largely on state decision-makers.  Former Governor Pawlenty's unallotments and cuts to Local Government Aids resulted not only in reductions to essential community protections, but also in skyrocketing property taxes. 

Because the state doesn't directly raise your taxes but causes them to go up as a result of their decisions, these property tax increases are one of the many "hidden taxes" that the state has imposed under the former Governor's leadership, which also include fees and other local taxes.

The new Republican majority in the legislature needs to be honest with Minnesotans about the budget decisions that they make.  If they cut Local Government Aids, then they need to honestly account for the non-partisan research that says property taxes go up and we pay more. 

Instead of blaming local government for cutting essential community protections like police and fire when they have no other choice, Legislative Republicans should be honest with area residents about the impact of cuts to Local Government Aids.  Forcing local officials to choose between sewers that back up into people's basements or raising property taxes is not "living within our means."

But if we really want to do better in Minnesota, we need to start looking at more fair ways to build the kind of state we want.  Are property taxes really the best we can do to fund our schools, protect our communities from harm with police and firefighters, and provide essential services like sewers and clean drinking water?  Or is there a better way?

It's only when we have an honest conversation with the people of Minnesota, like House DFL leaders did last weekend, that we can answer these important questions about the future of our state.

 Debra Hilstrom

DFL Deputy Minority Leader

Minnesota House

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