Letter to the editor: Legislators replaced broken system with stability

Stuart Macdonald’s arguments regarding the New Homestead Market Value Exclusion law (HMVE) lacks an understanding of why the old Homestead Market Value Credit (HMVC) had to be replaced (letters to the editor, Sept. 12).

Under the expiring law, the state reimbursed Woodbury for the sum of the market value credits granted to taxpayers on tax statements. As a result, the city’s levy came from the state as credit reimbursement payments and from property tax payments. When the state cut its reimbursement payments, Woodbury had to budget for the gap between their levy and what they received from the state. According to Woodbury City Administrator, Clint Gridley, “We’ve advocated for years to eliminate the program for the very reason that it has not been funded.” In 2008, the city was entitled to $698,675 of reimbursements but was paid only $344,837. For the years 2009-11, the city was entitled to a total of $1,644,187 but received $0 in reimbursements. Mr. Gridley stated Woodbury has been reimbursed only 2.5 times in the last 10 years with $6 million not reimbursed. While homeowners realized the “credit” on their property tax statements, cities were forced to raise local property taxes year after year on all types of property to make up for the state’s failure to reimburse and were forced to estimate the compensation amount from the state.

Thanks to Rep. Andrea Kieffer and Sen. Ted Lillie, the HMVC was repealed. The new HMVE law provides cities with the consistency in local tax revenues necessary to fund services. Although the transition may be rocky for some communities, once the change occurs there will be no more property tax increases or cuts in reimbursement payments due to state reductions. Property owners will see property tax relief and cities will have consistent numbers with which to budget.

Lance J. Johnson - Woodbury

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