Legislative Reports & Updates, Reports & Updates from Gail

Property Tax – Again!

“This credit will be deducted from your overall annual property tax bill. The combined property tax relief packages should cut an average 40 percent off of your 2013 property tax bill.”

-Rep. Mike Nathe – Forum op-ed (see below)

I have to tell you… this type of selective speaking is beginning to scare the ever-living bejeezus out of me! Consistently the GOP wants to paint the picture of a 40% tax property tax reduction for 2013. It will NOT be 40%! That number is a cumulative percentage that includes years going back to 2007. So, in that context roughly half of that 40% has already been driven forward and realized by the tax payers. In this year – for the 2014 tax statements – the actual percentage is closer to 20-25% (depending on area, valuations, etc) for THIS one year. I’ve confirmed this with several county auditors who’ve all projected similar numbers for this year. 

Why does this scare the bejeezus out of me? Because this erroneous and misleading phraseology is setting the property owner up for the wrong expectation – and is setting up the local entities to be thrown under the bus. Once taxpayers see they will NOT be receiving a 40% reduction in this year, the atmosphere will be ripe for the extremists that want to eliminate property tax entirely to resurface after their failed attempt in 2012. And, in this case, where a number of legislators are all too eager to move the attention away from the state and over to the local (feels like a game of hot potato!) I believe the debate will be much more difficult to win, short-sighted as it is.

I’m all for good, honest and deliberate debate on ways to reform our property tax system – this needs to happen in ND. I’m also 100% for accountability in tax payer spending. But, part of that discussion includes the very legislators who want to pass the buck – who want to just toss more money in the kiddie as the easy answer – and then blindly walk away from any responsibility in the entire process. Reform – and even true relief – is far more complex than just tossing money around. Local people have a lot at stake here – and if our property tax system is simply removed – without benefit of real understanding of cause and effect – it will be the PEOPLE who will be stuck with the consequences (while governmental leaders continue with the “its not me” argument??). Here in ND there are an abundant of resources and availability for services in the urban areas (and state legislators to protect them) – but this is NOT the case in the rural areas. And, like it or not, geographically we are still a primarily rural state…. at least for now.

Mike Nathe – Fargo Forum 7/8/2013

In funding $850 million in property tax relief, the 2013 North Dakota Legislature has done its part to reduce your local property tax bill. Now it is up to local elected officials to do their part and hold the line on spending and property tax increases due to rising home values.

The state does not set property taxes, does not collect them, and the state certainly does not spend property taxes. The power over local property taxes is given to local entities such as cities, counties, park districts, townships and schools. The state does, however, have the power to allocate money to buy down local property taxes by providing these local governments more state money.

That is what we did during the last session.

The state has a constitutional obligation to help fund education and, as a result of the work done during the 2013 session, the state will now fund about 80 percent of school districts’ budgets. The Legislature appropriated more than

$1 billion for school operations and $656 million in state-funded property tax relief for schools. This school property tax relief will replace school funding, which in the past would have been drawn from local property taxes.

To reform our state’s school property tax system, the new education funding model also contains restrictions on the percentage of home value or mills that school districts can levy. Any mill levy over the state limit for a school district would have to be approved by a vote by the residents of the school district.

In addition to the property tax relief provided for schools, the Legislature also provided $200 million in a state-funded property tax credit. This credit will be deducted from your overall annual property tax bill. The combined property tax relief packages should cut an average 40 percent off of your 2013 property tax bill.

Whether all this property tax relief will end up in your pocket is now in the hands of the local governments. These local government officials have the choice of passing the state-funded tax relief on to their taxpayers or letting rising values and increased spending consume part or all of the state-funded property tax relief. Taxpayers and voters must hold their local elected officials accountable for how this tax relief is managed.

Even in the face of rising values, these boards and commissions will have the choice to reduce the local property tax mill levy to ensure local taxpayers realize the tax relief intended by the state Legislature.

The Legislature has heard the call from the residents of North Dakota to reduce property taxes and has responded by providing more than $850 million in property tax relief. Now it is up to the local governments to do their part.


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