Biology junior Dawn Demmon helped contribute to the state’s budget surplus, but will reap none of its returns if Gov. Jesse Ventura’s rebate proposal passes.
She lived in Middlebrook Hall last year and paid no property tax, which makes her ineligible for a rebate under Ventura’s proposal, even though she paid income taxes to the state.
On Wednesday, the Taxpayers League of Minnesota identified several groups of people that would be left out under Ventura’s proposal. Taxpayers who wouldn’t receive a rebate include those who didn’t pay property taxes and dependants — those who claim on their taxes that they are still financially dependent on their parents or guardians.
Those exceptions would leave many University students like Demmon with no rebate.
“Ventura’s plan would shut out a bunch of people that do have income but don’t have property,” said Kent Kaiser, communications director for the league. “Most college students don’t qualify for the renter’s property tax rebate.”
Ventura’s proposal, released last week, would tie the budget surplus refund to sales tax. The plan would estimate the amount of sales tax paid by each household during the previous two years and return a percentage of that amount.
However, Ventura’s plan would give rebate money only to taxpayers that received a property tax rebate last year, meaning those who paid no property tax in 1998 would not receive the refund.
Matt Smith, Ventura’s revenue commissioner, said the proposal would avoid overpaying certain households while automatically returning the money to those who qualify.
“There is a trade-off that we have to acknowledge between having to do things absolutely fairly for every situation and making the rebate automatic,” Smith said.
Darrell McKigney, president of the taxpayers’ league, criticized the Ventura plan for its effects on younger people.
“Everyone who contributed to the budget surplus has a right to a rebate,” he said. “It’s ironic that the people whom Ventura credits with getting him elected — young people — are the very ones he’s seeking to deny their rightful rebate.”
Ventura gave two reasons why his sales tax rebate is better than the Republican proposal, which would issue refunds based on income tax. By tying it to the sales tax, the Internal Revenue Service would not require that Minnesotans pay federal income taxes on the money.
He also said his proposal would give back to the lower-income and middle-income brackets, to people that paid sales tax but not income tax.
John Wodele, Ventura’s spokesman, said the current plan qualifies 200,000 more people than other proposals. However, he said, the plan could change before it clears the Legislature.
“Today in talking with some legislators, we are looking at the possibility of amending our proposal to try to be more inclusive,” he said. “Whether that can be done, we are not sure.”