Audio: Dalrymple Says Property Taxes Can Still Go Up Under Property Tax Relief Scheme

jackdalrymple

I mentioned this briefly in my post about Governor Dalrymple’s State of the State address earlier today, but I thought these comments about property taxes were noteworthy enough for their own post.

Since 2007 the legislature has been trying to tackle the problem of property taxes. In hindsight, I’d point out that the legislature probably should have heeded warnings from those of us who said that they never should have opened this can of words. But I digress.

The problem is that, while the legislature has appropriated hundreds of millions of state tax dollars ($752 million to be precise) to buy down property taxes (not really relieving taxes but just shifting the burden from the local level to the state), property taxes have continued to rise. As evidence, this chart shows the relentlessly upward climb of property taxes, including their rise after the beginning of the state buy-downs in 2007:

1984_2011_Property_Tax_Graph

In a nutshell, the problem is that even as the state sends more more to the local governments, the local governments just tax and spend more.

For the coming biennium, Governor Dalrymple wants to double down on this approach to property tax relief. He wants to give local governments $714 million as part of a permanent, on-going buy-down of property tax mills related to school funding. Now, again, this is problematic in that we’re not really reducing tax burdens so much as shifting tax burdens from local to state. But even more problematic than that is Governor Dalrymple’s declaration, during his State of the State address, that local governments can go right on raising their local property tax mills after they get this windfall of new money from the state.

I’m glad the Governor cleared that up. Seriously. I was worried my local government was going to stop raising my taxes.

All kidding aside, what Governor Dalrymple is doing is ensuring that North Dakotans will see their state tax burdens increase (Dalrymple’s plan accumulates more school funding to the state level) while leaving the path clear for more property tax increases at the local level.

This is not tax relief.

Rob Port is the editor of SayAnythingBlog.com. In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters. He writes a weekly column for several North Dakota newspapers, and also serves as a policy fellow for the North Dakota Policy Council.

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  • Dustin Gawrylow

    Define: Bailout & Takeover

    • http://sayanythingblog.com Rob

      Well he’s bailing out local governments by taking on their spending, instead of asking them to make their case for the spending (and the higher taxes) to those who elected them.

      And it’s not a total take over, but the state is going to be paying 80% of school funding now. After the “Keep It Local” stuff from last summer, that sounds suspiciously like a take over.

      • Dustin Gawrylow

        Uhhh, I was defining this as a bailout and takeover.

        • http://sayanythingblog.com Rob

          OK, no need to be a weiner about it.

  • JW-American

    Copied from other thread..
    Here is and Idea for Property tax.. Have the state pay down 80% of the mills, on Private Property only, Ag land NOT INCLUDED. Taxes are a fact of life for business, and agriculture is a business, not a hobby or a family tradition, its a BUSINESS. You have 10 acres for your house, its a home, have a house and 40 acres for your horse, its your still your home. have 120 acres rented to the neighbor to hay or crop.. It’s a business!

    The 80% of the mills based on 2 years prior budgets, rather than a set year like the M2 was, tied to also to a mill levy cap of the 2 years budget. plus rate of inflation. Any amount of local spending over that prior cap would require 65% voter approval.

    Without caps, the state cannot ever supply the cites enough money, without the vote of the people, the cities have no local control.

    City needs a new building, fire truck or street, go to the people and sell the idea.

    • http://sayanythingblog.com Rob

      How about the state just stops bailing the locals out on property taxes entirely and instead implement tax relief in one of the areas where the state actually levies the tax?

      This summer we had a debate about a state solution for property taxes. Voters rejected it, being convinced by the “Keep It Local” argument. So let’s keep property taxes local, and instead eliminate the personal income tax.

      • JW-American

        I could live with that too, or shift some sales taxes to the communities in exchange for caps too.

      • Drain52

        That’s what makes this tax shift so obscene–it allows local gov to hide spending increases in the state budget and robs the people of any control over local gov. This tax shift is an end-run around those of us who want to rein in local spending.

  • Roy_Bean

    How in the world can we convince Heidi/Harry/Barry that we have a spending problem at the federal level if we can’t address our own spending problem here in North Dakota? Republicans control every branch of government in the state but the dollar amounts that they see coming into the state treasury has turned them into virtual Marxists. State government and the state tax system shouldn’t exist for the purpose of redistributing oil wealth to the far reaches of the state. When the state “buys down” property taxes they don’t reduce the amount of money taken out of the economy, they just re-arrange where it comes from.

  • VocalYokel

    “Scheme” sums this plan up in a single word.

  • Charles Ingalls

    Jack Dalrymple, Democratic Governor of North Dakota

  • Lloyd Hohn

    so, the alcoholic walks into the bar and says, “hey how about another round…on the house”

  • LibertyFargo

    “In a nutshell, the problem is that even as the state sends more more to the local governments, the local governments just tax and spend more.”

    Bingo.

    It is a shell game.

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