North Dakota Property Taxes

October 20, 2011 by staff 

North Dakota Property TaxesNorth Dakota Property Taxes, A proposed constitutional amendment that would make North Dakota the only state in the nation to abolish property taxes would be “the most profound change in policy since statehood,” said County Commissioner on Monday.

The measure, which goes to a statewide vote in June 2012, is causing controversy in North Dakota, where oil and gas have contributed to the expansion of the economy and low unemployment rate has largely insulated the state of the nation’s economic malaise.

That prosperity has led to the arguments of North Dakota can afford to eliminate local property taxes, and its economy more attractive for business expansion, if it did. Critics say the change would require the Legislature to meet and 740 million in other parts of the school districts in North Dakota, counties and cities.

Scott Wagner, a Cass County Commissioner, said the amendment would result in a donnybrook Capitol on budget priorities with elected officials who have no vote on how the fights were resolved.

“This is potentially the most profound change in policy since statehood,” said Wagner.

A group of citizens critical of government spending has increased the proposed amendment on the ballot. General Fund expenditures of the state and has doubled from 2 billion to 4 billion and, since 2005.

If the amendment is approved, the Legislature would have to develop a replacement plan to provide money to local governments. School districts in North Dakota, counties and cities rely on property taxes to fund their services.

No state has abolished property taxes, although several have tried to limit its growth, according to the National Conference of State Legislatures in Denver and the National Association of Counties in Washington, DC

Jacqueline Byers, research director of the National Association of Counties, said that local governments have collected some property taxes during a good economic year, but have not taken the step of removing them.

“They need (property taxes) in their arsenal,” said Byers.

Supporters of the ban on property taxes, said it is necessary to prevent further property owners on fixed incomes being priced out of their homes by rising tax bills.

Vernon Brossart of Williston, in booming northwest North Dakota’s oil producing area, said rising property values ??allows local governments to rake in more revenue without increasing tax rates.

Homeowners who have sold their homes and moved to the apartment to avoid property taxes are now faced with sky-high rents, the result of strong demand for housing of the oil workers, Brossart said in an interview Monday.

Local officials also create their own problems by granting income tax exemptions for new and expanding businesses, he said.

“Guess who pays the rest? I do. My next door neighbor does,” said Brossart. “The retired man who worked all his life and paid for your house does not get (an exemption from property taxes).”

Wagner spoke Monday at a meeting organized by the Association of Counties North Dakota to discuss the proposal. The group included a supporter of the measure, state Rep. Dan Ruby, R-Minot, and three opponents – Wagner, state Sen. Dwight Cook, R-Mandan, chairman of the Senate Finance and Tax Committee, and Andy Peterson , chairman of North Dakota Chamber of Commerce.

Cook predicted a series of lawsuits by local governments to interpret the scope of the obligation of state government to provide income to replace property taxes.

The Legislature, which has reduced taxes in North Dakota income individuals and corporations in recent sessions, was pressed to push rates again, he said.

“We live in a world of uncertainty, and nothing will take the wheels to an end faster than the type of uncertainty,” said Cook.

Peterson said that North Dakota companies share these concerns.

“We have to start looking at a comprehensive model of tax reform, rather than the dog’s tail cut off,” Peterson said. “If you have a piece of farm machinery that breaks, you do not put a hand grenade in the engine compartment and then say we’re going to fix it.”

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