Exploring Options to Alleviate Property Tax Pressure in Minneapolis
Steve Brandt, the chairman of the Minneapolis Board of Estimates and Taxation, is looking into alternative solutions to lighten the burden for homeowners.
MINNEAPOLIS — If you’re a homeowner in Minneapolis feeling the sting of rising property taxes over recent years, you’re certainly not alone.
Brandt shared, “I know members of the Board who have had to sell their homes and rent instead, partly because of property taxes.” It’s a challenging situation for many.
He mentioned that Minneapolis is already among the top ten cities in terms of revenue derived from property taxes. In fact, property taxes currently account for about 48% of the city’s revenue, and projections show that number could rise to 57% within the next six years.
“Every year we discuss property taxes, we hear stories of homeowners, often on the lower end of the economic scale, feeling squeezed out,” Brandt explained. “I believe we need to do something. I can’t change it myself, but I’m eager to understand community opinions to explore better approaches.”
In a recent column published in the Minnesota Star Tribune, Brandt discusses several strategies that other cities have successfully implemented and highlights three particularly noteworthy alternatives.
City Income Tax for High Earners
Brandt recognizes that while introducing a city income tax could generate substantial revenue, it also raises important concerns that must be considered.
“We should carefully examine how other regions were affected when they enacted an income tax and whether it led to people leaving,” he pointed out. “That could definitely be a downside.”
City-Specific Real Estate Transfer Tax
Brandt also noted that some cities have opted for real estate transfer taxes as a way to increase revenue with fewer adverse effects.
Erdahl asked, “Is this something the city can handle, or does it need to go through the council?”
Brandt clarified, “No. Most of these proposals will require approval from the legislature.”
Voluntary Payments from Large Tax-Exempt Property Owners
Rather than seeking legislative change, Brandt suggested the city could persuade large tax-exempt property owners—like major hospitals, churches, and schools—to voluntarily contribute for city services they utilize.
Blunt proposed, “One tactic that has worked in Boston is publicizing whether these entities are making payments or not.”
Erdahl then questioned, “So it’s technically optional but carries a hint of public shaming?”
Brandt confirmed, “Yeah… of course.”
He also pointed out that various other cities are implementing alternative methods to ease property tax pressures. However, he wants to address a recurring suggestion he’s received.
“Many readers suggested cutting city spending,” Brandt remarked. “That falls under the City Council’s responsibilities, not ours. I’m open to reviewing it closely, and I’d like those who advocate for spending cuts to tell me what services they think should be reduced.”
