A bill that would create a new tax on homeowners was heard and passed in the Minnesota House Local Government Division last week. The proposal, HF 527 (Masin), creates an end-run around requirements imposed upon cities under the special assessment laws designed to protect property taxpayers.
A handful of cities have been attempting to impose these fees without any authority. In 2018, the Minnesota Supreme Court ruled unanimously and struck this down in Harstad v. City of Woodbury. In this case, the City of Woodbury, was trying to impose a nearly $8,000 fee per home.
These new costs unnecessarily add to the price of homes by placing a disproportionate burden on new homeowners. Local governments already have multiple tools to raise revenue to fund infrastructure and do not need to create a new mechanism.
During the hearing, Nick Erickson, Director of Regulatory and Legal Affairs, testified in opposition to the bill. “Our housing affordability is the worst in the Midwest, our inventory of available homes is among the worst in the United States, and most shamefully, our housing equity gap is among the worst in the country,” said Erickson. “Adding a roadblock to housing access when Minnesotans need roadblocks lifted will drive our housing crisis deeper in the wrong direction.”
The bill is scheduled to be heard in the House State Government Finance Committee on Thursday. The bill has yet to be heard in the Minnesota Senate.
