I work for Hennepin County, home to Minneapolis in its southeast corner and, 25 miles to the north or west, precincts of an exurban or small town character. Here, as in most parts of the country, money for local government services--public schools, fire and police protection, streets and snow plowing, sewer and water, parks and recreation, libraries, public transit, mosquito control--is raised by taxing owners of real property. There is as a result a crazy quilt of taxing districts superimposed, as it were, over Hennepin County and the rest of the Twin Cities metropolitan area. The parts of the quilt are defined by municipal boundaries, school district boundaries, county boundaries--there are a few others, but those are the main ones.
The task of identifying tax parcels, assessing values, maintaining tax rolls, sending out statements, collecting and disbursing payments, processing overpayments and applications for abatements, administering delinquent accounts and getting forfeited property back on the tax rolls--it's all made more complicated by this quiltwork. No tax parcel, for example, can be in two counties, or two municipalities, or two school districts, because all these different taxing authorities have their own levies that can be applied only against property in their own jurisdictions. So if a school district boundary happens to bisect your front yard, Hennepin County sends you two tax statements, even though to you it is of course only one property--what you call "my house."
Over time, as technology developed, different work areas developed different systems to cope with the complexity, and then their own "work-arounds" to address problems that arose. I lately have been spending a lot of time on a project that we hope will enable us to retire our various "legacy systems" and implement a single system, to be used by the assessor and the auditor and the treasurer and the recorder, so that everyone can discharge their various duties more efficiently. But I can't help thinking that, in a saner arrangement of society, this entire effort might not be necessary.
The taxing boundaries I've described determine the details of the bill property owners receive from their county government, but they are in every other way completely artificial. By that I mean that they have nothing to do with the way people live. Regarding cities, for example, people may reside in one, work in another, drop the kids off at day care in a third, go to church in a fourth, and shop for groceries in a fifth. My high-school friends have a revolving poker game during the winter months, and to attend I generally have to drive in three or four different suburbs, but I am not conscious of crossing any boundaries. The Twin Cities make one metropolitan area and the people who live here cross these tax boundaries ten or thirty times a day without ever thinking about it. The fellow with a school district line running through his front yard crosses a boundary forty times when he cuts his grass.
These counties and cities and school districts purchase the services they provide in the same market place for comparable prices. They also have the same means of raising funds--namely, levying a tax on real property in their jurisdiction. But in some jurisdictions the property is worth more. There are more commercial properties, or the homes are larger and more expensive. Because of their greater tax base, these wealthier districts can tax at a lower rate and still raise more money than their poorer neighbors. Moreover, since higher home values price out people most apt to need government services, it tends to be true that the most affluent citizens enjoy the best schools, the highest levels of local government service, and relatively low local tax rates. As people succeed, or lag behind, they congregate in their separate enclaves across the region. Everyone knows which places are the most and least desirable to call home.
Minnesota has in the past recognized the inequities of such a system, and has undertaken to remedy them, at least to a degree, largely through a system of state aid to local government. That is changing, however, as the state faces financial challenges under Republican Governor Tim Pawlenty, who has drastically cut state aid in order to stop the flow of budgetary red ink without raising taxes. Smaller units of government, strapped even more than before with their state aid cut, raise their local property tax rates. Pawlenty boasts that he has not raised taxes, but people are paying higher property taxes, especially in venues that formerly depended on state aid to compensate for a lack of property wealth.
So the complexity of the property tax system, besides being a headache to administer, with elements that undeniably border on farce, makes for bad public policy. It helps create, within the same metropolitan region, pockets of affluence and success, often in areas with pleasant topographical features, and other less pleasant places where the housing is shabby and the residents poor. The interests of the people living in these different places are in conflict, and, lately, the advantages enjoyed by the more affluent have been enhanced by the state government, which is far less inclined than before to use the proceeds of its progressive income tax to redress the inequities of the property tax system.
The Twin Cities make a single metropolitan area and there should be a single metropolitan taxing authority. Why should where you live within the region be determinative for property tax purposes, when you and everyone else cross these meaningless boundaries many times every day? Why should neighbors living in identically valued homes across the street from one another receive property tax bills that differ by more than ten percent if the street that separates their front doors happens to form the boundary between municipalities? I'm not advocating something that has never been tried or can't be done--see, for example, the Wikipedia article on Unigov, a reform of the kind I support that was adopted in Indianapolis, Indiana, under Republican Mayor Richard Lugar, who now represents Indiana in the US Senate, almost forty years ago.
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