Wednesday, March 18, 2009

Advocacy Opportunity: Renter's Credit

As a result of calculating information for the Elder Index, MinnEESI learned that housing costs are the most challenging budget item for elders in Minnesota (if they are in good health).

The renter's property tax refund program is a state-paid refund that provides tax relief to renters whose rent and "implicit property taxes" are high relative to their incomes. "Rent constituting property taxes" is assumed to equal 19 percent of rent paid. If that rent constituting property tax exceeds a threshold percentage of income, the refund equals a percentage of the tax over the threshold, up to a maximum amount. As income increases:
  • the threshold percentage increases,
  • the share of tax over the threshold that the taxpayer must pay increases, and
  • the maximum refund decreases.
Nan Madden, Director of the Minnesota Budget Project, provided us with the following information:

The Renters' Credit provides a tax refund to nearly 274,000 low- and moderate-income Minnesota households whose property taxes make up a large share of their incomes. Seniors and persons with disabilities make up 28% of all Renters' Credit recipients.

Governor Pawlenty's budget includes a 27% cut to the Renters' Credit. At a time when the state faces a serious economic downturn and a significant lack of affordable housing, renters in Minnesota cannot afford this cut.

Many Minnesotans use the Renters' Credit to meet basic needs such as delayed dental care, school clothes and supplies, car repairs, bills and prescription drugs. The Governor's proposed cuts reduce the Renters' Credit by $51 million a year - that's $51 million less being spent in our local communities.

We need to stop asking our most vulnerable Minnesotans to bear the costs
of balancing the state's budget. What can you do?
By Marie Nelson

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