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Progressive Politics in Minnesota, the Nation, and the World

LickSpittle Norm

Category: US Politics
Posted: 05/18/05 02:06, Edited: 05/18/05 08:35

by Dave Mindeman

Lickspittle. Now there's a word you don't hear everyday (at least not on this side of the "pond";). I felt compelled to find out what it meant when a British member of parliament, George Galloway used the term, calling Coleman's panel a "lickspittle Republican committee, acting on the wishes of George Bush."
Well, I couldn't let that pass -- I went right to the internet and found this definition in the Hutchinson Encyclopedia:

lickspittle: n. toady, flatterer

You know, that is probably a good summation for the activities of this "toady" committee. Norm could be investigating things that are a little more interesting.... like, the British Memo that indicated the Bush administration fabricated the reasons to go to war; or maybe he could track down what happened to that missing $8.5 billion unaccounted for in the occupation; or maybe he could do some checking on why no senior military officers except a woman National Guard general received punishment or reprimand for Abu Ghraib. There ARE things for Norm to investigate. Unfortunately, Norm only has eyes for Annan.

Mr. Galloway also said something else that piqued my interest. He compared our own Senator Coleman to Joe McCarthy. Norm?? Just like Tail Gunner Joe? Ok, I couldn't let that go without some checking there too.... here's my list:

Norm Coleman: Lawyer, JD from Univ. of Iowa
Joe McCarthy: Lawyer, JD from Marquette Univ.

Norm Coleman: Student body President at Hofstra University.
Joe McCarthy: President of his Law School Class at Marquette

Norm Coleman: Defeated for Governor (1998) in first run for state wide office.
Joe McCarthy: Defeated in Republican Senate Primary (1944),
first run for state wide office.

Norm Coleman: Former Democrat turned Republican
Joe McCarthy: Former Democrat turned Republican

Norm Coleman: Supported Wellstone in 1990 and Clinton in 1992
Joe McCarthy: Voted for FDR -- 4 times!

Norm Coleman: Became Senator in a close race, replacing Progressive Paul Wellstone.
Joe McCarthy: Narrowly defeated Bob LaFollette in Republican primary. LaFollette was one of the most liberal people of his day and was head of the Progressive Party previous to this. He attempted to return to the GOP in this primary. (Yes, there used to be Progressive Republicans!)

Norm Coleman: Married to actress and model, Laurie.
Joe McCarthy: Married Washington socialite Jean Kerr, voted the
most beautiful woman at George Washington University.

Norm Coleman: Chair of Senate Governmental Affairs Committee-Permanent Sub-committee on Investigations.
Joe McCarthy: Chair of Government Operations -- Permanent
Sub-Committee on Investigations.

Norm Coleman: Pushed himself into limelight with
December 04 Wall Street Journal piece calling for Kofi Annan to resign because the UN is riddled with an oil for food scandal. Guilt by association offered, but no proof.

Joe McCarthy: Pushed himself into spotlight in a February, 1950
speech accusing the State Dept of having 205 known Communists in its employ. Not a single name was ever divulged or discovered.

It is a little eerie to see that Coleman is chair of the very same committee that led to that ugly time in our history. McCarthy and Coleman are very similar in ego and ambition. While Joe McCarthy's rise and fall were swift in both directions, the jury is still out on good ole' Norm.

One thing for sure. We won't have to worry about what to nickname our illustrious Senator... McCarthy was famous as Tail Gunner Joe but that doesn't hold a candle to "Lickspittle Norm"!

Gotta love it, you old toady.

Shouldn't this guy be on the no-fly list?
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Good Riddance to Limit Value

Posted: 05/16/05 19:20

by Paul Bartlett, Eagan
Accredited Minnesota Assessor (retired)

As municipalities throughout Minnesota held their 2005 budget hearings, there was a palpable public lament over the scheduled phase-out of limit value assessments. Good riddance to a terrible assessment law! It's just unfortunate that the financial damage done by limit value cannot be retroactively corrected.

Limit value has held a specious attraction. Afterall, one could reasonably ask "what's wrong with limiting the taxable value of my home?" Plenty! Read on.

Minnesota has a hopelessly complicated assessment and property tax system. The system mixes ad valorem tax policy with social policy and includes a number of tax concepts (homestead, limit value, tax capacity, "this old house", and more). It is a complete mystery to most property owners. As limit value fades into the sunset, one of the least understood provisions of Minnesota assessment law will thankfully end.

In a nutshell, Minnesota Assessors establish two homestead values: the assessed value (market estimate) and the limit value (taxable value). The assessed value is set annually; it should reflect current market value; and, it can be raised or lowered by any amount. The limit value is capped annually; it is not market derived; it is legislatively determined. The annual property tax is not based on the assessed value, but on the usually lower limit value. Limit value has been an unearned windfall for many and a financial drain for the less fortunate who have subsidized that windfall.

Let's debunk the principal myth. Limit value does not limit the total tax or levy within a municipality. It redistributes the tax. Home owners in stagnant value neighborhoods have subsidized rising value neighborhhods.

The key property tax variables are the levy (total dollars) and the tax base (total assessments). If the levy rises faster than the tax base, taxes will rise. And, visa versa. The levy increases that we are seeing now are largely due to decreased local government aids. Tim Pawlenty and the GOP controlled House are primarily responsible for those higher levies.

Limit value has skewed individual tax bills, but has had no affect on the total levy. The limit value cap is set by the legislature and has usually fallen in a range of eight to twelve percent. Thus, the taxable value of a homestead could not increase in one year by more than the cap. If the municipality contains only one assessment area, limit value is irrelevant. If the true market value exceeds the capped value, the tax rate simply increases due to the suppression of the tax base. If there were no cap, the rate would decline.

Limit value can create tax inequity between neighborhoods, resulting in a reverse Robin Hood effect. For example, I worked as an appraiser in the Edina Assessment department several years ago. Market trends vary widely between Edina neighborhoods; that data determining the subsequent year assessments. Neighborhoods that fell below the limit value cap subsidized neighborhoods that benefited from the cap. The reason is simple: while the total levy was never affected, the tax rate was forced higher due to the suppression of the tax base. Stagnant value neighborhoods were the losers; rapidly increasing value neighborhoods were definitely the winners.

The practical result of limit value has been the creation of different taxable levels for the same property class in the same municipality. For example, assume three neighborhoods, each displaying different market characteristics and an average annual eight percent cap:

Neighborhood Annual True Inflationary Increase Capped Increase Taxable (Limit) Level
A +5% (1.05/1.05) x (1.05/1.05) x (1.05/1.05) = 100%
B +15% (1.08/1.15) x (1.08/1.15) x (1.08/1.15) = 83%
C +25% (1.08/1.25) x (1.08/1.25) x (1.08/1.25) = 63%

As the above data demonstrates, the taxable level declines as the spread between inflationary increase and the limit cap widens. This example is based on the statutory target level of 100% and illustrates three years of accrued limit value discounting.

So what does this mean in English? Well, assume an accurately assessed $250,000 homestead in each neighborhood with a 1.25% tax rate:
A $250,000 x 100% x .0125 = $3,125.00
B $250,000 x 83% x .0125 = $2,593.75
C $250,000 x 63% x .0125 = $1,968.75
Due to limit value discounting, the tax disparity between the neighborhoods has grown greater each year, with neighborhood A heavily subsidizing neighborhood C.

Without limit value, the tax on each property would be the same, $2,562.50. Neighborhood B would see very little change; Neighborhood A would see a significant tax decline; For the owners in neighborhood C, well, their gravy train has jumped its tracks.

Due to limit value discounting, it is ironically true that a lower value home in one neighborhood can carry a higher tax than a higher value home in a different neighborhood. Using the above example, the tax on a $100,000 assessment in neighborhood A would be $1,250.00 ($100,000 x 100% x .0125). But, the tax on a $125,000 assessment in neighborhood C would be only $984.38 ($125,000 x 63% x .0125). The neighborhood A home would have a $100,000 ($100,000 x 100%) assessed and taxable limit value, while the neighborhood C home would have a taxable limit value of only $78,750 ($125,000 x 63%). In this tax obsessed nation, how did this little quirk occur?

(Annual assessments in Minnesota are usually determined by applying overall adjustment factors on a district or neighborhood basis. That process is referred to as trending or factoring. The above examples follow that method, and employ the simpler of the two limit value calculation methods.)

Article X of the Minnesota Constitution requires that taxes be uniform upon the same class of property. While tax rates have been uniform, limit value has created assessment and tax inequity, resulting in a defacto clash with the intent of the uniformity requirement.

So, let's debunk that other myth, that the average Joe has benefited from limit value. Nonsense. Owners who have realized the greatest inflationary gain in home value have received a direct tax subsidy from the less fortunate. Robin Hood took from the rich and gave to the poor. Well, the 'Grinch Who Stole Christmas' would be a better poster-boy for limit value.

Succinctly, home owners who have experienced the greatest unrealized capital gain have received the greatest tax subsidy. Does this seem fair?

Owners of newer houses have fared even worse under limit value. Because new houses are generally assessed at a higher percent of market value than the existing stock, and because owners of new houses have received no benefit from accrued limit value discounting, these owners can expect to pay fifty percent (or more) more tax than the owners of comparable value "older" homes.

This is not a Republican vs Democrat or conservative vs liberal issue. I am a liberal DFL'er, and my position is that comparable value homes should carry comparable tax obligations. Limit value is an obstacle to tax fairness. I realize that many of my fellow DFL'ers support limit value.

In the past, limit value has raised its ugly head on the eve of its extinction, and been extended. If either party, GOP or DFL, move to again prolong its life, call your legislators with one unequivocal message: "I'm as mad as hell and I'm not going to take this anymore".

Good riddance to limit value! With its repeal, our property taxes will be fairer. And, the goal of the ad valorem system, connecting the tax to value will be restored. As the value lost to the cap is added back to the assessment base, tax rates should drop noticeably. For everyone who has benefited by limit value, someone else has paid more than their fair share. It is a zero sum game.

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Limit Market Value

Posted: 05/14/05 09:20

By Paul Bartlett

During a recent interview on MPR (05-11-05), Pawlenty stated that he would support a continuation of Limit Market Value (LMV), contradicting his prior position that LMV should be phased-out as scheduled.

LMV is an arcane property tax law that shifts the tax burden from
individuals who have realized the greatest actual or potential capital gain to individuals who have not been so fortunate. It is a scam. It is a disgrace. And, it has created what is possibly the most inequitable property tax system in the country. LMV is Minnesota's version of reverse Robin Hood, where we "take from the poor and give to the rich."

If you own a house that has not kept pace with the inflationary trend, or even worse, if you own a new house, your property tax is likely about 50% higher than it would be without LMV. Your excess tax pays the subsidy to the LMV recipients. LMV violates the intent of Article 10 of the Minnesota Constitution (requiring uniform tax rates) by tinkering with the underlying assessments. The result: Uniform rates but not uniform taxes.

LMV is scheduled to sunset at the end of 2007. There are multiple bills in the legislature to extend LMV beyond that date, and with Pawlenty's flip flop support, extension is nearly fait accompli. If you are concerned with that old fashion notion of tax fairness, call or write Pawlenty and your state House and Senate members and demand an end to LMV.

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