North Dakotans face great uncertainty with taxes

To provide North Dakotans with property tax relief, the Legislature first bought down 75 mills of property taxes for school districts in 2009; the cost was $295 million. When lawmakers followed up in 2011, the bill was $341 million.

Increasing property values makes the 75-mill buydown increasingly expensive and, for lawmakers, has raised questions of sustainability.

The increasing cost of property taxes that has the public frustrated, now has visited itself upon legislators, and they are looking for alternative methods of providing property tax relief without linking it to property value.

Now would be a good time to do this kind of reform. The state is flush with revenues from the oil boom and would have the resources if it became necessary to pay for a transition to a different, fair and more controllable method of providing relief. A number of legislative interim committees are to look at these tax issues; however, that work is on hold until after the state’s voters cast primary ballots on Measure 2, which could eliminate property taxes in North Dakota if passed.

Either way, the Legislature will have to do some major rewriting of the state tax code.

One possibility would be to exempt the first $75,000 of a home’s value when figuring property taxes, with the state covering that cost. That might be linked to including farm homes as taxable property, with a majority of farm homes falling under the exemption and, thereby, treating rural and urban residents alike. How property taxes are applied to farm land would have to be addressed. These proposals would replace part or all of the present system of buying down 75 mills levied in school districts.

Income tax and sales tax might need to be refigured, as well. Such proposals will raise many questions for legislators and for citizens.

The truth is North Dakotans face great tax uncertainty.

Fortunately, the state’s robust economy gives people more flexibility than they might have in a weak economy.

The bottom line: No one should have to pay more in taxes than they do now. There’s no justification for raising taxes whatsoever. If anything, people should have to pay less.

Tags: other views, measure 2, opinion, editorials, taxes