More state taxpayers take advantage of refund programs

Associated Press

ST. PAUL -- The check will soon be in the mail for hundreds of thousands of Minnesotans owed property tax refunds from the state.

The Revenue Department is scheduled to send out more than 280,000 such checks by the end of the month, with the average refund nearly $400.

And that probably won't be the end of it. Homeowners who saw their property taxes increase more than 12 percent from last year still have time to apply for the rebate.

Minnesota's property tax refund program, designed to ease the shock of fast-rising property taxes, appears to be more popular than ever thanks to the latest round of double-digit hikes.


Dennis Erno, deputy revenue commissioner, said that applications for the refund are up 97,000 over last year. "That's quite a big jump," Erno said, given that the state has 1.5 million homeowners.

Renters also get a piece of the refund action. Factor them in and the state will issue more than 550,000 checks totaling more than $250 million. And because homeowners and renters have a full year to apply, that figure could increase.

"It could be a lot more after this story gets out," Erno said.

That's because not everyone who qualifies for the program applies. Erno said the state has no way of knowing what the participation rate is, but it is thought to be fairly high.

And while it may seem odd for the state to shell out hundreds of millions of dollars on property tax refunds at a time when it is slashing other programs, there are reasons why the subsidy endures.

Begun in the 1970s as a way to keep low-income homeowners in their homes, the subsidy, sometimes known as the "circuit breaker," has been a favored way for state politicians to ease the property tax burdens of their constituents. DFLers and Republicans alike have worked over the years to keep the program going, to raise the income limits and to boost the amount of the subsidy itself.

Finance Commissioner Dan McElroy said that the refund programs were long-standing, but that he was surprised at how large they've become. "I was not aware they took in that many households," he said.

McElroy said the Pawlenty administration had not undertaken any review of whether such refunds were the best use of tax money. "These have been very popular programs among both legislators and citizens. We've often talked about whether we had these programs right, but it is hard to make changes when so many people benefit."


One concern, McElroy said, is that any cutback of the program would have the net effect of raising property taxes for those homeowners.

What To Read Next
Get Local