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ST. PAUL, MN-Minnesota faces almost a $2 billionshortfall in taxes this year, and while a recessionmay be to blame for a large part of that, somelegislators are starting to blame the state’s historicproperty tax reform for the predicament.

But Gov. Jesse Ventura told the MinnesotaChamber of Commerce this week that he will use currentbudget reserves and spending cuts to manage thestate’s budget shortfall and resist any attempt toundo the property tax reform enacted last legislativesession.

The chamber endorses Ventura’s approach,arguing that property tax reform and other tax cutsare not responsible for the current shortfall. The taxrelief given to homestead and commercial/industrialproperty resulted from moving significant primary andsecondary school education expense from the localproperty tax to state revenues.

In addition, theLegislature increased state aid to cities andcounties. State spending increased as a result of bothactions, contributing to the current gap betweenrevenues and budget.

“The Legislature must avoid rewriting history andshifting the blame, especially since property taxrelief and reform is more necessary than ever,” chamber president David Olson says in a preparedstatement. “The property tax is a fixed cost that doesnot reflect current financial conditions and is acritical expense for business that cannot receivecircuit breakers or other forms of state aid.”

The chamber likes Ventura’s suggestion that the statefollow a business model to solve the budget shortfallby looking at ways to cut expenses. The chamber is working on a legislativeagenda for the 2002 legislative session that wouldhelp the state emerge from the recession in a healthy fiscal condition. __________________________________________________

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