Commentary; Posted: 5/14/03

Reverse referendum is bad tax policy

Don Heinzman

Minnesota Gov. Tim Pawlenty and the House Republicans would be wise to take the reverse referendum out of their budget proposals, because it is bad policy for local governments. A reverse referendum would only cause mischief and confusion in an already complicated local property tax world.

Under this plan in year 2005 or 2006, voters could petition for a special election to erase a property tax levy increase greater than the previous years. In other words, if the local city council, township were to raise the property tax levy by 3 percent, the voters could erase it during an election in January.

All this is on top of expected cuts in local government aid and tax credits on cities, townships and counties.

The governor wants his cake and he wants to eat it, too. He is proposing no new taxes in his budget which eliminates $4.5 billion in spending to balance the budget.

Therefore, he is cutting state aids to local government, while at the same time preventing locally-elected council and county board members from raising funds needed to provide necessary services.

The sad part of all this is the public does not understand the intricacies of the property tax system. For example, a hike in the property tax levy actually could reduce taxes, if the increased taxable market values go up enough.

What the public will understand is their property taxes will go up and they will have the ability to lower them through this reverse referendum. Getting signed petitions from five percent of the number who voted in the last election will be easy, because what property taxpayer wouldnít sign such a petition if confronted with one.

Then the city and the county would have to pay for the expense of an election and defend the increase and convince the voters they should raise their taxes. Should the levy be reversed, the governmental bodies would have to reduce expenses and unravel what is expected to be lean budgets.

This is not to demean local voters, but letís face it, in this busy world it is difficult for voters to stay knowledgeable about local government spending and taxing decisions. Thatís what they expect from their elected officials.

County boards, in particular, are vulnerable because the county is an extension of state government and must administer all state health and human services. A reverse referendum makes this difficult if the county board has its taxing arm tied behind it.

Local governments, like all levels of government, will have to cut expenses and lay off people, depending on how deeply the Legislature cuts state aids.

Next year could be bloody. To deny the ability of local policy makers to raise needed local levies is just bad tax policy.

There already is a local referendum on local council members and county board members. Itís called an election.

Thatís the time when the voters can decide on ousting incumbents who do not spend money wisely. Having that taxing decision reversed during a ìStop taxing our citizensî campaign is a gimmick that should not be allowed to become law.

Voters who favor good local government should write their legislators and tell them not to pass this reverse referendum. Itís bad tax policy and the legislators need to hear this message.

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