House Tax Committee weighs $4 billion one-time property tax refund, members warn of budget and equity risks

A one-time, $4,000,000,000 property tax refund proposal drew sharp debate in the Minnesota House Tax Committee as members pressed the author and testifiers on budget fallout and equity.

Representative Boris presented House File 49 06, amended by the A1 amendment, saying the bill would create a calendar-year 2026 refund available to owners of residential homesteads and qualifying agricultural homesteads. “The bill appropriates $4,000,000,000 in fiscal year 2027 to make payments, and that amount of money would be divided among the qualified applicants in proportion to the amount of tax due on each property in 2026,” the committee summary said.

Opposition testimony focused on scale and distribution. Eric Bernstein, director of We Make Minnesota, told the committee: “At a general cost of $4,000,000,000, this bill would put the state in a deficit in [the] current biennium and substantially worsen our fiscal picture for '28-'29.” He said the average payment would not meaningfully address affordability for many households and that the largest share of dollars would flow to higher‑value properties.

Nan Madden, director of the Minnesota Budget Project, said the bill is untargeted and excludes renters: “This bill only benefits homeowners and does not include any kind of income limits or measure of need. Minnesota renters would receive nothing.” She warned the appropriation would “punch a huge hole in the next biennium's budget” and posed risks to health care, SNAP administration and other services now required by federal changes.

Committee members pressed fiscal and practical questions. A Department of Revenue representative and House research staff disagreed on whether the refund would be taxable; House research said it likely would be treated as a recovery of prior tax and excluded from gross income, while the Department’s preliminary view flagged possible taxable treatment. Members also asked about timing, administrative burden and whether a more targeted approach (e.g., rebates tied to tax increases or income thresholds) would better serve households in need.

Several members emphasized different priorities in their districts. Representative Wiener praised targeting homeowners in rural and farming counties, while others, including Representative Gomez and Representative Howard, urged caution about the long‑term effects on the state budget and recommended exploring targeted or structural solutions.

The author emphasized the bill is scalable and that the proposal was offered to start discussion. The committee voted to lay HF 49 06, as amended, over for possible inclusion in the omnibus tax bill.