Despite Property Tax Relief, Property Taxes Keep Going Up

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Written By:
Rob Port

Oct 10, 2012
9:41am

Starting in the 2007 legislative session and continuing through the last session in 2011, North Dakota (at the behest of governors John Hoeven and Jack Dalrymple) has appropriated hundreds of millions of dollars to local governments as “property tax relief.” The specific figure is $752 million over the years, but what has the impact been on property taxes?

Almost nothing. Property taxes continue to rise, so much so that in June there was a measure on the ballot that would have eliminated property taxes entirely. It was defeated, but the consensus in the state is that property taxes remain a problem. And they’re going to remain a problem if this report about rising property taxes around the state is accurate:

Mark Johnson, a spokesman for the North Dakota Association of Counties (a lobbying group that represents the state’s counties), lays the problem with local governments not getting a big enough share of state tax revenues. “Yes the state has a surplus and I know that the governor and legislators are looking at ways to distribute that money back to local units of government cities, counties, townships,” Johnson tells the reporter in the story.

What’s frustrating about that comment, beyond the $752 million in property tax relief local communities have already received (not to mention countless state and federal grants and funding programs) is that it ignores the expanding tax base, and expanding tax revenues, at the local level. It’s not like cities, townships and counties aren’t seeing any increase in revenues. Property is being developed. Building permits are being issued. Those are major sources of new revenues. Competently-governed localities should be able to use the revenues from their growing tax base to do the maintenance, and provide the services, to their growing communities.

That doesn’t seem to be happening in western North Dakota, and why would it? Starting in 2007 the state committed itself to bailing out local spending problems and calling it “property tax relief.” Bailouts create the expectation of more bailouts. The local governments aren’t going to solve their own spending/taxation problems because Governor Hoeven, and now Governor Dalrymple, has allowed the state to become the patsy of local governments.

Which is par for the course with local government these days, where leadership doesn’t so much mean solving problems as figuring out how to punt problems up to higher levels of government.