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Progressive Politics in Minnesota, the Nation, and the World

LMV Logic

Category: Minnesota Politics
Posted: 10/22/05 15:06, Edited: 10/22/05 15:12

by Paul V. Bartlett, Accredited Minnesota Assessor (retired)

As we approach ?Truth in Taxation? season, Minnesotans are being warned to expect double digit real estate tax increases next year. Larger tax bills are only symptomatic of a much bigger problem:an unfair assessment and tax system.

In a good faith effort to mollify real estate taxes, Minnesota has a long history of enacting tax laws aimed at reducing taxes for one group or another. ?This Old House? is intended to encourage
revitalization; ?Green Acres? is aimed at preserving open space;
?Homestead? hopes to encourage home ownership; and the 800 pound gorilla, ?Limited Market Value?, is meant to restrain tax growth.

The problem with all of these programs is that they do not constrain taxes; they simply redistribute existing levies and push up tax rates through arbitrary value exclusion. Traditionally, real estate taxes are directly correlated to value (ad valorem). Minnesota?s system has morphed into a maze of tax shifts between neighbors and neighborhoods.

Most property owners fall into both the receiving and paying sides of our hopelessly complex system; few if any know whether they are net gainers or net losers.

A case can be made for ?This Old House?, ?Green Acres? and
?Homestead?. Each of these programs is aimed at a social need; each accomplishes a higher good. But, Limited Market Value (LMV), the Grand Puba of all tax shifts, is much closer to a Ponzi scheme than to a socially justifiable tax subsidy. Under LMV, the owners of homes in high home inflation neighborhoods are assessed and taxed at less than full value. The owners of new homes and owners in low home inflation neighborhoods pay the difference. The sole qualifying criteria is relative value growth. Owners who have received the greatest unrealized home capital gain are being directly subsidized by owners who have seen little or no gain. What would Robin Hood think?

Many Minnesota homeowners are being financially squeezed by rising real estate taxes. Our state government can and should assist these homeowners. However, assistance eligibility must be means tested; there must be sane eligibility criteria. Under the present LMV system, many of Minnesota?s wealthiest homeowners receive an unearned and certainly unneeded tax break.

In existence since 1992, the LMV logic has been: Ma and pa will be forced to sell their home if their real estate taxes go any higher.
Now that?s one specious argument! But, what if ma and pa are so flush that they couldn?t spend all their money in ten lifetimes? Should they be subsidized?

LMV should be mercifully put down and replaced with a means tested assistance program. Many of our fellow citizens need help and it has nothing to do with relative home inflation. A young couple with college loans, kids in school, two cars in the driveway and a mortgage are just as worthy as ma and pa.

A tax assistance program can be formulated using the reverse equity mortgage concept. In a nutshell, eligible homeowners (I leave it to the financial brains to determine eligibility) would receive a state tax assistance ?loan?, secured by a lien against their home. The loan interest rate would be adjustable and pegged to the prime rate. The owner could repay the loan at any time, or regard it as manna from heaven. However, upon the death of the owner or the sale of the home, the loan plus accrued interest must be repaid to create marketable title. The truly needy homeowner has been helped and the state has been repaid. Win win! Such a program would self-finance with a replenishing loan source; only startup cash would be needed.

I can hear the moans and groans already, ?another government
program?, to wit I say, ?nonsense.? The current LMV program is a budget busting bomb of hitherto unknown tonnage. It has excluded over $30 billion dollars of taxable value, causing the loss of over $300 million tax dollars. Assessing departments around the state have wasted millions of taxpayer dollars implementing the LMV scam. And far worse, it has forced one owner to subsidize another, with total disregard for need or ability to pay. It is shameful.


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Smiling Tom

Category: US Politics
Posted: 10/21/05 10:49

by Dave Mindeman

Wasn't that a great picture of Tom Delay? He seems like a genuinely happy man. Maybe he should be... after all, he is going to be going on an extended vacation. His campaign committee has the second biggest wad of cash in Congress. And he takes a great mugshot. I'd probably order an 8 X 10 glossy package if I were him.

What a great smile. The man looks exuberant. You'd never know that his future is clouded by a courtroom date. But then, as with everything that happens to Tom, its all politically motivated. Ironic isn't it? The most politically partisan figure in the most polarizing time in America is shocked by political motivations. Keep smiling, Tom... that vacation of yours might just lead to a wonderful early retirement.
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To the Honorable Patrick Fitzgerald

Posted: 10/20/05 13:35

By a Concerned Citizen

To the Honorable Patrick Fitzgerald:

I know you are hard at work ferreting out the criminal elements of the White House, but I am hoping you will consider a few comments about how to handle those pesky indictments.

First of all, if you have to limit your indictment scope, keep your eyes on the prize. There is always a cheap lie to be had going after Big Karl. Indict him on false testimony and, my God, you'll open the flood gates. The lies will come out faster than FEMA can screw up a hurricane.

Secondly, nobody is going to pay attention to an indictment on anybody named "Scooter". It sounds like your going after a Peanuts character. Besides, can you imagine Mr. Libby's prospects in prison? A picture of "Scooter" linking up with some 300 pound behemoth with a tattoo on his arm that says "I Never Liked Mom"... well, it just isn't pretty.

Now, regarding Judith Miller. We all liked her much better in jail... please find a way to put her back. Surely you must have extracted enough testimony from her to meet your requirements... now just find a reason to dump her back in the pokey and we will all be much happier.

And I do hope that your final report is going to explain the WHIG group (White House Iraq Group??). Is it a sinister, underhanded, covert insider group hawking our country into war or is it just a bunch of people with bad hair,er scalps? You know, with Rove, Ari Fleischer, Dick Cheney, and hey, even Condi involved... sinister and hair both fit. We need to know..... have you subpoened the local barbers?

And while your at it, can you make up something for Robert Novak? He probably didn't do anything illegal but he's annoying as hell. He must have some overdue parking tickets somewhere? Right?

Anyway, thank you for doing a wonderful job. It has been refreshing to see a grand jury handled with such precision. You have kept such a tight lid on everything that the media has been forced to ask wayyyyy more questions than they usually do. Thank you very much... they needed the practice.

I look forward to the final deliberation and even if you don't hand down a single indictment, it has been fun watching everybody sweat.

Thanks again,

Signed.. a concerned citizen who has all outstanding parking tickets paid up!

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