What others think" Legislature will be in position to provide tax relief

North Dakotans have spoken. Clearly. They want property tax reform. The budget Gov. John Hoeven presented to lawmakers this week makes for a very good start at providing just that. The difficulty, some lawmakers correctly note, will be in the details.

Hoeven has budgeted $300 million for property tax relief, and $100 million for income tax relief.

If the Legislature agrees, the $300 million would, dollar-for-dollar, replace an average of 75 mills from school levies, dropping the average district levy from about 180 mills to 115 mills.

Seventy-five mills amounts to $17 million for the Bismarck School District and $4.2 million for Mandan. It would translate into about $340 in property tax relief for a Bismarck-Mandan homeowner with a $100,000 home.

The state would be picking up, long term, a larger share of the cost of primary and secondary education.

It would mean, with all state funds considered, that the state would be funding schools at the long sought-after goal of 70 percent. That’s the reform part of the equation.

It’s substantive property tax relief. It’s what voters have asked for. It’s a good start.

However, there still are serious issues that need to be addressed.

— If the state buys down the school districts’ mill levies, what’s to stop school boards from raising those levies in the future? The governor anticipates that the caps on school mill levies will come down.

— If the overall property tax bill comes down, say by $340, what’s to stop cities and counties from filling the vacuum by raising their share of property taxes? Would the Legislature find caps acceptable? Would cities and counties find caps or other restrictions acceptable?

These issues helped derail property tax reform in the 2007 session. They represent the details that will be so important when lawmakers arrive on Jan. 5.

The governor’s budget also includes $100 million in income tax relief. It ranges from 20 percent on lower incomes to 5 percent at the top. It provides some balance in the overall tax equation, and makes sure everyone benefits from the state’s good fortune.

Neither the property nor income tax relief comes out of the state’s surplus. It does assure a certain level of sustainability.

Based on the discussion in the 2007 session on property taxes, the will of the voters expressed in the general election and the governor’s budget, it would appear the Legislature will be in a position to grant the public desire for property tax relief and reform.

Tags: north dakota, tax, releif, property, income