What others think" Reform property tax in N.D.
Reforming property taxes must be the top priority for North Dakota's Legislature when it meets in 2009. But make no mistake, overhauling the system will not be easy. It might not be in everyone's interest to fix property taxes. Nevertheless, lawmakers must find the political and economic will to do the job.
People often say that the thing they know about property taxes is that they are too high. They say property taxes need to be reduced. They want to pay less property tax. And they are right. But there's a disconnect between property taxes reform and its consequence. Reducing property taxes cuts the lifeblood of local government. Unless, of course, the state replaces that money with revenues from sales tax (regressive) or income tax (progressive). Or local government cuts services.
There's another issue in asking the Legislature to reduce property taxes: local control. There isn't much support for shifting decisions on schools, roads, police, fire protection or neighborhood parks from city commissions, park boards, school boards and county commissions to the state. If the Legislature reduces property taxes and replaces them with sales or income taxes (both of which would likely have to be increased), then state lawmakers are going to want some say in how local government operates. Or, if the Legislature simply cuts or caps property taxes, who tells local government what services to cut?
Reforming property taxes will require fundamental changes at the local level, on the revenue side of the equation and the expense side.
Property taxes are driven here by the size and extent of local government. Lawmakers will have a great deal of difficulty reforming property taxes, but it would be easier if citizens made the connection between property taxes and the function of local government. The Legislature's senators and representatives would be better able to do the job of reforming property taxes if the people of the state were behind them. Because there will be a price. There will be winners, yes, but those who lose as well. There are jobs and programs at stake.
As the Legislature goes forward on property taxes, it needs to keep the process transparent. Be honest with the people, they can take it.
In the coming months, property tax reform will be an issue that we will return to frequently. It's an important issue for all North Dakotans, and it cannot be set aside again. The return of funds to the public from the state surplus two years ago, through credits on state income tax, was a partial solution, a move in the right direction, but the state needs true reform of its property tax system.
The 2009 Legislature, despite a huge surplus, because of a huge surplus, faces a remarkable challenge with property tax reform. Better to do this when you are flush than when you are flat broke. Having a $1.2 billion surplus suggests the state is flush.
Reforming property taxes will be the issue upon which the 2009 Legislature will be judged. Those who stand in the way or seriously hamper this effort should not be returned to office.