Chamber of Commerce bites its own butt

My continuing meditation is still on hold while I soak up some serious Chicago. However, while I’m trying to keep non meditation posts in abeyance I really couldn’t help but comment on this story in today’s DNT.

One of the chief beneficiaries of the Red Plan, the realtor for F.I.Salter, comments with concern about unexpected property tax increases.

Looking at seven to eight properties his firm manages in Duluth, Sandy Hoff, president of F.I. Salter Co. Inc., said their assessed values have remained steady, but his tax bill has increased by about 5 percent across the board.

“That creates a challenge for us as property managers,” he said, explaining that it’s difficult to pass on those expenses to tenants who are already struggling.

“I’m not against the park and library referendum; I think they will do nice things for our community,” Hoff said. “But we need to be very mindful when we have 5 percent increases like this. They can’t continue. We need to reel in the cost of government so it’s in line with inflation.”

He noted that next year’s property taxes look likely to grow at about double the rate of inflation.

I did not follow the state’s recent changes to property tax collections but according to the story they were significant:

The state stopped paying down property taxes for qualifying residents and instead ordered local governments to exclude a portion of a home’s value from taxation. The exclusion program can lower, for taxation purposes only, a property’s value by as much as $30,400 for a $76,000 residence. The more a home is worth, the smaller a break it receives. The exclusion disappears altogether for houses worth $413,800 or more.

The switch to an exclusion program reduced local tax bases, leading to double-digit tax rate increases last year in St. Louis County and around the state.

Dicklich said the homestead changes had an especially large impact in St. Louis County, where relatively few residences are expensive enough to be ineligible for an exclusion.

The close to half billion cost of the Red Plan has thus shifted more heavily to commercial properties which have none of these recent exclusions.

There is some justice in this because residential property taxation is extremely regressive meaning that poor homeowners pay relatively more than rich homeowners or businesses. For a long time the state’s Chamber of Commerces have lobbied to lower commercial property taxes. These new state laws have inflicted serious taxation on Duluth properties which have been affected by the near half billion Red Plan costs which were strongly advocated by the local Chamber of Commerce. its called Poetic Justice.

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