Truth in Taxation statements to arrive this week
It is the news people don't want to read but are nevertheless eagerly anticipating.
Truth in Taxation statements for 2012 will go into the mail Thursday, according to Hubbard County Auditor Pam Heeren. Most taxpayers will receive them Thursday or Friday.
Legislative changes to the market value homestead credits (MVHC), now called the homestead market value exclusion, will result in many taxpayers getting sticker shock, seeing 4 percent tax increases on average.
Under the exclusion, a tax reduction to all homesteads valued below $413,800 shifts "a portion of the tax burden that would otherwise fall on the homestead to other types of property," stated a Minnesota House explanation of the 2011 omnibus tax act.
"The repealed MVHC gave homesteads approximately the same amount of tax relief through a state-paid credit rather than through shifting," House researcher Steve Hinza wrote.
"Each home contributes a smaller amount to each taxing jurisdiction's tax base. The rate tends to be a little higher because of the reduced tax base, which is why taxes increase for other types of property," Hinze indicated.
"The tax burden on any given homestead could be lesser or greater depending upon the mix of properties in the jurisdiction (more non-homestead properties increases the likelihood that homestead taxes will be reduced and vice versa) and the level of the tax rate (higher tax rates make it more likely that homestead taxes will be reduced and vice versa)."
Heeren said 24,000 TNTs, as they are called, will be mailed out. The statements include estimated market value for 2011 and 2012, the homestead exclusion applicable for their property and taxable market value.
It is the blue section toward the bottom of the statement that will cause consternation. That's where actual property taxes for 2011 are shown, along with proposed taxes for 2012.
"This does not include any special assessments," she said.
The percent of change is hard to estimate, she said.
"Most of them are going up," she acknowledged. "There's a few going down and I haven't had the time to look into why. The majority will go up."
But the county voted to spend $500-600 to include a special insert that theoretically explains the tax law changes. The inserts will have a red bar across them to differentiate them from the TNTs.
County officials are bracing for phone calls. State legislators that passed the tax act during a hurried session after last July's shutdown are now scrambling to do damage control in the face of a public outcry.