Protecting the Renters' Credit
The Minnesota Budget Project opposes cuts to the Renters' Credit. The Renters' Credit is an important tool to ensure that low- and moderate-income Minnesotans do not pay more than their fair share in taxes.
Issue Overview
The Renters' Credit provides a property tax refund to more than 281,000 low- and moderate-income Minnesota households, thirty percent of which include seniors or people with severe disabilities. The Renters' Credit refunds a portion of the property taxes that renters have paid through their rents. The Minnesota Department of Revenue finds that the Renters' Credit is one of two state tax credits that make a real difference in ensuring that low- and moderate-income Minnesotans do not pay more than their fair share in taxes.
Cutting the Renters' Credit is bad for the state's economy. Minnesotans report that they use their Renters' Credits to buy medicine or school clothes for their children, to catch up on bills, or for other basic needs. In today's fragile recovery, businesses need customers, and cutting the Renters' Credit takes millions out of Minnesota's economy.
In 2011, the Minnesota Legislature passed $186 million in cuts to the Renters' Credit. Governor Dayton vetoed that proposal, so it did not become law. The final budget agreed to by Governor Dayton and the Legislature included a $26 million cut to the the Renters' Credit starting with credits filed in 2012. Nearly 300,000 Minnesota households will lose an average of $87 because of this cut. About 7,300 Minnesota households will lose their entire credit.
Status
The tax conference committee finished its work on April 30, 2012. Their conference report made no cuts to the Renters' Credit.
The Renters' Credit had been at risk because the House Tax Committee had included a drastic $67 million cut to the Renters' Credit in its omnibus tax bill (House File 2337). House File 2337 would cut the Renters' Credit by nearly 40 percent, in addition to the cuts passed in 2011. One in five households would lose their entire credit - that's 66,200 households. The average credit for households including seniors and people with severe disabilities would be cut by $103, and the average credit for all other households would fall by $256.
The Senate's omnibus tax bill made no cuts to the Renters' Credit. Governor Dayton commended them for taking this position, noting that protecting renters' property tax refunds is "protecting an important source of consumer demand for Minnesota businesses."
Get Involved
Please thank policymakers for protecting the Renters' Credit this year.
- Thank Governor Dayton for his strong support for the Renters' Credit.
- Thank the members of the Tax Conference Committee for not making cuts to the Renters' Credit. Senate members of the conference committee are: Senators Julianne Ortman, Roger Chamberlain, Warren Limmer, Geoff Michel and Julie Rosen. House members of the conference committee are: Representatives Greg Davids, Sarah Anderson, Jenifer Loon, Tara Mack and Linda Runbeck.
The Minnesota Council of Nonprofits has prepared information for Contacting Your Representatives and Helpful Tips for Contacting Legislators.
More Information
- Tax conference committee avoids cuts to renters’ property tax refunds, passes tax bill, Minnesota Budget Bites
- Lawmakers still considering asking renters to pay for business tax cuts, Minnesota Budget Bites
- 2012 House Tax Bill Would Severely Cut Renters' Property Tax Refunds
- House bill punishes Minnesota renters, Rochester Post-Bulletin editorial, March 23, 2012
- Poor shouldn't pay for business breaks, Star Tribune editorial, March 22, 2012
- Who Receives the Renters' Credit?
- Minnesota Department of Revenue information on applying for the Renters' Credit
- More information on the Renters' Credit can be found in the Tax Credits section of our website and on Minnesota Budget Bites.
Staff contact: Nan Madden, Director, 651-757-3084
