Minnesota renters make the case why the Renters’ Credit should not be cut

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.

-Nan Madden

About Nan Madden

Nan Madden is director of the Minnesota Budget Project.
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4 Responses to Minnesota renters make the case why the Renters’ Credit should not be cut

  1. Nan Madden says:

    The Minnesota Department of Revenue has the information and forms for Property Tax Refunds:

    For homeowners (also called the Circuit Breaker): http://www.taxes.state.mn.us/taxes/prop_refund/refund_information/content/homeowners_refund.shtml

    For renters (Renters’ Credit or Renters Rebate): http://www.taxes.state.mn.us/taxes/prop_refund/refund_information/content/renters_refund.shtml

  2. toddturchin says:

    When does the home owner have to have our renters rebate papers out. so we can file for our rebate.

  3. Considering the cut in personal care attendant hours, will Mr. Zozaski get a double-whammy ?
    Yesterday, I was visiting a friend who had just received his letter telling him of the hours cut for his health care aide … he (and she) were distressed … he is currently recovering from surgery and is now in need of virtual round-the-clock care … so his aide is “volunteering” six hours a day. Sad, sad, sad.
    I appreciate your efforts to educate people on the impact of the Renters Rebate program … I feel it is one of the cruelest cuts that Pawlenty will implement.
    The old adage that the only difference between a “depression” and a “recession” is who is out of work (when my neighbor is out of work, it’s a recession; when I’m out of work, it’s a depression) seems to be applicable here … a cut isn’t a cut unless you are impacted … sadly, the Governor in a short sighted manner is hitting the people that need it the most the hardest.

  4. debbie says:

    My name is Debbie, and I live on SSI.
    I get $674.00 a month to live on.
    I am not able to work due to health reasons.
    My renters refund that I get back helps me out with food and paying bills, etc.
    I am against Governor Pawlenty bill to cut 27% of the renters refund from all of us who is just trying to survive.
    I feel he should the Governor give us all our renters refund back early every year–like around may or june of each year, instead of him making us all wait so long to receive it in August.
    Thank you all for reading how I feel about this matter.
    Debbie Gilsrud

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