The Minnesota Budget Project has made a range of policy arguments against the Governor’s proposed cut to the Renters’ Credit – a cut he plans to carry out through unallotment. The Renters’ Credit acknowledges the fact that renters pay a portion of their building’s property taxes through their rents, and provides a state tax credit for low- and moderate-income renters whose rents make up a high portion of their incomes. The Department of Revenue reports that the average Renters’ Credit would be cut by $129 in 2010 under unallotment.
We oppose cutting the Renters’ Credit because:
- Rental property taxes are among the most regressive taxes in Minnesota, falling disproportionately on low-income Minnesotans. Cutting the Renters’ Credit would only make this worse.
- During a tough economy, assistance to low-income folks, who are likely to spend those dollars quickly and locally, is one of the most effective economic stimulus tools that government has. The Governor’s unallotment proposal takes $51 million a year out of our communities.
- This unallotment asks struggling Minnesotans to shoulder too much of the cost of balancing the state’s budget.
Recently, we’ve been hearing the voices of renters themselves in this debate. On Monday, Minnesota Public Radio highlighted the stories of Ernie McNeal and Robert Zozaski. These two retired gentlemen talk about how the Renters’ Credit helps them pay for basic expenses, such as food and health care. Here is just a part of their stories:
McNeal lives on about $1,000 a month in Social Security. His rent in the subsidized complex is about $300 a month. As the only sibling left, he shoulders the burden of his mom’s needs alone.
He’s looking forward to the end of summer, when he usually gets his renters’ credit check. It usually comes to about a month’s rent.
“Whatever I get back, it just helps out. It’s food for you.”
Eighty-year-old Korean War veteran Robert Zozaski, from Breckenridge, gets by on about $930 a month between Social Security and his pension from the VA. He saves money by eating lots of instant Ramen Noodles.
“You know, the Ramen Noodles and chicken flavor, I like,” Zozaski said. “One package of that, I double the water so I make two meals out of it.”
He’ll have to figure out a way to save even more money if he loses his renters’ credit, which usually puts a few hundred dollars extra in his pocket every year. He uses it to buy new clothes and pay his home health aide, who helps him with chores and laundry.
On MPR’s News Cut blog, Bob Collins asked readers whether they received the Renters’ Credit and how they use those tax refunds. And again, folks talked about the basics: car repairs and paying the bills.
We’ll continue to argue against this cut. Additional information and action steps can be found at our Renters’ Credit At Risk web page.