PARK RAPIDS, MINN. – John Knoblauch and his family have owned a cabin on scenic Hinds Lake for nearly 70 years. For more than half that time, they’ve been locked in a bitter battle with Hubbard County over a garbage hauling company that Knoblauch and others argue is operating too close to the lake, in violation of shoreline regulations.
The dispute has been so heated that Knoblauch promised his dying father a few years back that he’d put away enough money for legal fees to keep the fight going.
Last year, Knoblauch finally had had enough, and filed suit against the county, seeking an order to end the garbage operation. A judge’s decision on the case, tried in court last month, is pending.
“It’s a case of the locals protecting their own,” said Knoblauch, a homebuilder who lives in the Twin Cities suburb of Chanhassen. “Let’s all admit that’s the way this is. We’re paying the bill, but we don’t get a fair shake.”
The state’s 124,000 cabin owners, many of whom live in the Twin Cities area, pay a hefty share of the property taxes in Minnesota’s picturesque lake country. In 10 of Minnesota’s 87 counties, they shoulder more than 40 percent of the residential property tax burden, according to data from the state Department of Revenue. And in several counties, they pay more than 50 percent.
But Knoblauch and others say they often don’t feel like they have much voice in how that tax money is spent.
That frustration has prompted many property owners in lake country to question the fairness of a system where counties rely so heavily on taxpayers who live there only a few months of the year.
More than half of the residents on Detroit Lake in Becker County are seasonal, yet local officials often fail to engage them in plans for the lake, said Barb Halbakken Fischburg, president of the Lake Detroiters Association, citing a controversial lakeshore hotel development approved by the city of Detroit Lakes in 2015.
“Seasonal owners have to feel a part of the community,” she said.
The conflict between cabin owners from the metro area and rural counties is largely felt in central and northern Minnesota, where most of the state’s lakes are concentrated.
In places such as Crow Wing County, where cabin owners paid more than $34 million in property taxes in 2016 — the most of any county — local officials repeatedly hear complaints about “the old attitude of ‘taxation without representation,’ ” said Gary Griffin, land services supervisor for the county, located in the heart of the Brainerd lakes area. “We get that from time to time about [taxes for] school districts: ‘I don’t send my kids to that school.’
“But they still drive on those county roads. They still would call the sheriff if they had a problem. They still would call the fire department,” Griffin said, adding that Crow Wing officials “will treat you the same, whether you live here or not.”
Morrie Lanning, who represented the Moorhead area as a Republican in the Legislature for 10 years and was active in efforts to provide tax relief for cabin owners, said complaints about second-class status by property owners who don’t live in the county are real.
“Your voice doesn’t count nearly as much as those who can vote in that jurisdiction,” said Lanning, who has owned a cabin in Otter Tail County for nearly 50 years. “And this is particularly irritating in school bond issues. A lot of local jurisdictions, they kind of sell their [school] bond issues with the argument that a lot of the taxes are going to be paid by people who don’t live here.”
Jeff Forester, executive director of Minnesota Lakes and Rivers Advocates, recounted a conversation he once had with a county official in northern Minnesota. “She said to me: ‘Yeah, we used to mine iron ore up here. Now we mine lakeshore,’ ” said Forester, who has lobbied for years in favor of lowering cabin taxes.
“These are family places. These are intergenerational properties,” said Forester, who pays cabin taxes on a yurt in St. Louis County. “They’re owned by people who have made the decision that they want to spend their recreational dollars in Minnesota instead of in Branson, Missouri, or trips to New York or skiing in Colorado.”
Yet Forester also recognizes that for many rural counties, there aren’t a lot of other options. “How do we fund our rural communities? That’s a legitimate question,” he said. “How do you fund a school [in a district] that has no tax base other than cabins?”
Cabin owners often pay more in taxes than local homeowners because their lakeshore property is prime real estate.
In Park Rapids, seat of Hubbard County, “your high-end home is going to be worth $150,000 to $250,000, absolute tops,” said T.J. Simon, a broker with Wolff & Simon Real Estate. “Whereas with lake stuff, the moon is the limit.”
Simon’s firm has 25 listings for waterfront property in Hubbard County with sale prices of over $500,000, including one home listed at $4.95 million.
Local officials say they strive to keep a balance among taxable properties. In Otter Tail County, home to nearly 11,000 cabins, the county tax load is distributed almost equally among cabins, residential homestead properties and agricultural land, said Wayne Stein, the county’s financial services director.
“It makes for a healthier economic base,” he said, noting that cabins and other seasonal properties account for about 30 percent of the county property tax base, with homesteads and agricultural land responsible for 29 percent and 23 percent, respectively.
But add in other tax jurisdictions — schools, townships, watershed districts — and cabin owners in Otter Tail County account for 45 percent of the residential property taxes paid.
One of those Otter Tail cabin owners is Paul Marquart, a DFL state representative from Dilworth and ranking minority member of the House Tax Committee. Marquart said the taxes on his modest cabin are higher than on his year-round home, but he’s not complaining.
“If you’re a cabin owner, do you carry as much political weight as a year-round permanent resident? The truth of the matter is, you probably might not,” he said. “Do they pay a larger share than the services they’re using? Yes, they probably do.
“I understand that I’m going to pay a little bit more than the services rendered,” he added. “But I’m also going to have that recreational value that you can’t put a price on. To be on the lake, to hear the loons — that has a value to me that I can’t measure.”
Steve Lenertz, a retired air traffic controller from Maple Grove, fought Itasca County over a road that ran through his cabin property. He lost, and recently sold his cabin.
Lenertz said the locals in lake country often mock seasonal residents as “citiots” and “612ers,” a reference dating from when 612 was the main area code for all of the Twin Cities.
“When you come up and you have an issue that the government needs to resolve, they take into account who you are and ‘Can you vote for me or not?’ ” he said. “The joke was, ‘We just wish you’d mail your property taxes at the county line and go back home.’ I heard a county supervisor say that one time.”
Knoblauch said he knows the frustration. He and his neighbors have long fought Hubbard County over the garbage operation next to his cabin, saying it’s noisy, smelly and a possible health hazard. What’s more, they argue, county ordinances prohibit such an operation within 1,000 feet of a recreational lake.
In the recent trial, Hubbard County admitted that it had erred in letting the garbage hauling company operate there for 40 years, according to court documents.
Vern Massie, chairman of the Hubbard County Board of Commissioners, said cabin owners make a choice to own more than one residence. But, he said in an e-mail, they can only “live and vote in one place.”
Knoblauch, meanwhile, said the decades-long ordeal has taken a toll. “This isn’t about money,” he said. “This is really a 612er versus the locals. We did everything in our power to get the government to do something about this. We finally had to sue as a last resort.
“I told my dad on his deathbed, ‘I’ll handle this for you.’ ”
Jeff Hargarten provided data analysis.
John Reinan • 612-673-7402