As regular readers of our Minnesota Commercial Property Tax Appeals blog know, we recently wrote about looming state budget shortfalls and how they might be addressed by legislators. The state’s budget office said it projects a $2.4 billion deficit in the two-year budget period ending in July 2021 and an even bigger deficit of $4.7 billion for the next two-year budget.
Are commercial property tax hikes coming?
Those grim numbers have many commercial property owners worried that legislators might try to find the budget holes with tax increases on commercial properties.
However, a recent news article noted an absence of panic at the capitol. Legislators don’t appear to be in a rush to come up with a budget shortfall fix. Many observers believe no meaningful action to address the budget deficit will take place before January when new legislators are seated.
Many expect lawmakers to eventually craft a deficit fix that might include a mix of tax increases and spending cuts. But Minnesota Management and Budget commissioner Myron Frans recently insisted that the solution won’t include commercial property tax increases.
A reassurance about property tax hikes
“You don’t tax businesses who don’t have the capacity to be able to pay it and get back on their feet,” Frans told a Minneapolis radio station. “We can talk about everything, but the idea that you’re gonna fix it with a tax increase alone is not going to work.”
Gov Tim Walz approves of the go-slow approach. “I don’t think you have to fix this overnight,” he said. “We need to be smart. We’ve got a couple years to balance this. We’ve done it before.”
Big cuts coming?
Sen. Julie Rosen, chair of the Senate Finance Committee, told a Minnesota newspaper that she expects that one day soon, there will be a need for “massive cuts” in state spending, but that politicians are not quite ready to begin fighting over those spending reductions.
We’ll all be watching closely as lawmakers make difficult choices in coming days.