Measure 2: It’s in the wordsWith proponents and opponents at odds over what Measure 2 says, the final interpretation of the measure to abolish property taxes, if passed, in North Dakota will be up to the state Legislature and, likely, the North Dakota Supreme Court.
By: Kari Lucin, The Jamestown Sun
With proponents and opponents at odds over what Measure 2 says, the final interpretation of the measure to abolish property taxes, if passed, in North Dakota will be up to the state Legislature and, likely, the North Dakota Supreme Court.
At issue are not just the words of the measure, which the people will vote on in the June 12 primary election, but also which precise meanings of those words will be used to determine taxation policy in North Dakota.
“(Measure 2) does what it set out to do — it eliminates property taxes, very effectively,” said John Walstad, a code reviser with the North Dakota Legislative Council. “It is not as strong on laying out what happens after that.”
The Legislative Council is a nonpartisan group that works with legislators to analyze laws and legislation, do legal research and prepare bills in the proper format.
Contrary to some claims, the Legislative Council did not draft Measure 2, Walstad said. In reality, it was copied from a 2009 resolution, sponsored by Dan Ruby of Minot, which the Legislature voted down. The Legislative Council did review the form and style of the measure to put it into the correct format for introduction in the Legislature.
Reading the measure is simple. It can be found on the North Dakota Secretary of State’s website at https://vip.sos.nd.gov/BallotMeasurePortal.aspx by clicking on “Full Text of Measure 2.”
What those words mean isn’t as clear, according to the measure’s opponents. Some key words in the measure have multiple definitions or appear to contradict other portions of Measure 2, they say.
Interpreting Measure 2 would ultimately be up to the Legislature and the North Dakota Supreme Court, if the measure passes.
‘… fully and properly fund’
Questions have been raised about many parts of Measure 2 but the piece drawing perhaps the most concern lies in Section 4, paragraph 3.
“The legislative assembly shall direct a share of (taxes other than property taxes) … to counties, cities and other political subdivisions according to a formula devised by the legislative assembly to fully and properly fund the legally imposed obligations of the counties, cities, townships, and other political subdivisions.”
Exactly what “fully and properly fund” means is critical to Measure 2’s effect, but it is not spelled out within the text of the measure.
Charlene Nelson, chairman of the measure’s sponsoring committee and chairman of Empower The Taxpayer, a nonprofit political coalition in favor of Measure 2, believes local governments are not fully or adequately funded under the current system.
“They simply do not have the funds to meet those state requirements,” Nelson said, referring to townships fixing their roads.
However, there are no set guidelines laid out in Measure 2 as to what constitutes “proper” funding.
Robert Harms, a member of Keep It Local North Dakota, a coalition of people, groups and businesses against the bill, gave an example of a small-town police force.
Some people may believe two police officers are needed and others may argue that paying for eight police officers would be “fully and properly funding” law enforcement in that town, Harms said.
Another part of the measure may help define “fully and properly.” Section 4’s paragraph 2 states that property tax revenue is to be “replaced with revenues from the proceeds” of other taxes. But whether “replaced” means a dollar-for-dollar match, or some sort of general equivalent is not spelled out in the measure, and opinions differ on how to interpret that.
“As far as the replacement goes, it is dollar-for-dollar,” Nelson said.
The Legislative Council wasn’t so sure of that, calling “replaced” a “word of debatable meaning” in its report.
“In law, I’m not sure that it has a precise meaning,” Walstad said. “It could mean if we lose $5 we’d have to put $5 there to replace it. But you or I could replace Michael Jordan in the basketball game. It wouldn’t be an even trade, but we’ve still replaced him. Does it require equal funding? I don’t know. A court would have to decide.”
Ultimately, that would be the North Dakota Supreme Court, Walstad said. It could go through a district court first, which would make the process take longer.
Until that point, though, the Legislature would get to decide what “properly” funding means, Walstad said.
A formula devised by the Legislative Assembly
The third paragraph of Section 4 also says that money will be allocated according to “a formula devised by the legislature” and that the state government must “fully and properly fund the legally imposed obligations” of local governments.
“There’s no criteria by which that formula’s going to be determined,” Harms said.
Harms believes the measure meant to use the dollar-for-dollar replacement as a stop-gap measure while the Legislature took time to craft its formula — but that isn’t explicitly written in the measure’s text.
And if “replace” does indeed mean a dollar-for-dollar replacement, that could mean the legislative formula is only a discretionary supplement to that money, Harms said. But the legislative formula could also be meant to overwrite the dollar-for-dollar replacement funds.
Because the language of the measure isn’t clear, that issue, too, will have to be resolved, first by the Legislature and then by the courts.
Measure 2 proponents believe the formula will be fair, and will end the Legislature’s decision-making regarding the funding process.
Nelson cited the example of K-12 education, which utilizes an existing formula she said “fully, equitably, adequately funds all districts” in the state.
“By giving small towns this constitutional protection of being ‘fully and properly’ funded, it’s no longer in the hands of the majority,” Nelson said. “Small communities should welcome this because at last, we are breaking the grip that large cities have on rural funding.”
Opponents of the measure believe the process for devising the formula itself will be politicized.
“Rural North Dakota is going to get the short end of the stick because of the political process,” Harms said.
He also argued that it took nearly 20 years and at least two lawsuits to get the K-12 education funding formula into its current status.
“Our property tax system has some serious flaws in it that need to be fixed, but I disagree with (Measure 2 proponents’) solution primarily because … it takes decision-making out of local officials and puts it into the Legislature,” Harms said. “It concentrates power into the Legislature for funding decisions, and that process, like it or not, is highly political.”
Wednesday: Unknowns in the measure concern officials
Sun reporter Kari Lucin can be
reached at 701-952-8453
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