Dorso Column: Dalrymple Takes Easy Way Out On Property Taxes, Too Willing To Spend On Federal Programs

jackdalrymple

I tried to live stream the Governor’s budget presentation but couldn’t get to it even though I had Real Player. Calling the Governor’s office I found I wasn’t the only one. I’ve had a chance to read the online post from the Governor’s office but I’d have rather had the opportunity to assimilate the nuances of his presentation.

From my reading I have to say I liked a lot of what the governor has laid out. It has always been my contention that spending on infrastructure, whether for statewide flood control or highways and roads in the western counties, is a legitimate role for government. Both of those proposals will have long term benefits for the citizens of North Dakota. They will also in the end be a stimulus for economic activity in both the short and long term.

I also like the fact that the Governor has gotten off the property tax buy-down bandwagon. Whether his proposal for K-12 funding is a good thing I’ll deal with another day.

Way back in the 90’s I became upset about the revenue sharing bill the legislature dealt with every session. Simply put, we allotted a certain amount of tax revenue to the political subdivisions. The fight was always over the size of the total allocation and how it was divided out. Basically the larger a subdivision’s mill levy the bigger their chunk of the pie. Municipal park boards were playing the game as well as cities, counties and townships. A battle would ensue between rural and city legislators and I felt it counter-productive. I called Mark Johnson representing the Association of Counties and Bob Johnson representing the League of Cities in for a meeting. I told the Johnson boys (no relation) that I was tired of it and would do my best to kill the appropriation if they didn’t come up with an equitable formula for the distribution. Way back then I could see that the State’s efforts at trying to hold down property taxes were futile. They must have known I was serious as they produced a formula that the legislature liked. Actually I was hoping they wouldn’t have and we would have been done with the whole thing.

The only real relief property owners will get on property taxes is if there is enough pressure on the legislature to cap the increases of taxes at 3, 4, or 5% of the total levy per property each year. Whether that is good public policy would be a hard fought battle. I can see the school districts, cities, counties and other local entities mounting a full frontal attack. The legislature and Governor are taking the easy way out by handing out the state’s tax revenue in the hope of having property tax payers feel good about their efforts. Witness the hundreds of millions spent on the effort since Governor Hoeven was first conned into the ill-thought policy.

It might have been good politics because the Democrats made it a campaign issue but it wasn’t good policy.

It would be interesting to know how big a percentage of the total of property evaluations out of state landlords and corporations own. Even if this property tax relief was real (it isn’t) who gets the benefit? If the legislature were to suspend the personal income tax, you know the majority of the money would stay in North Dakota.

I was intrigued by the Governor’s proposal to replace the $93 million the Feds are cutting out of county Medicaid with state funds. Following that logic as the Federal entitlement programs are cut the state, will as I predicted last week, end up holding the bag. If our country goes over “the fiscal cliff” or it comes down to a battle over the debt limit can the state pick up the full tab after the cuts? More importantly, shouldn’t an honest debate on the value of the programs take place in the legislature?

Picking up the tab because the state has a surplus is relieving the counties of some issues they should have to face. Regardless of the state surplus the legislature should be prepared to make the political subdivisions share in the pain if the federal government comes to its fiscal senses.

John Dorso represented District 46 in the North Dakota state legislature from 1985 to 1999 and as served as House Majority Leader from 1994 to 1999. He is also the author of When Governance Worked: It’s Time to Chart a New Course.

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  • JW-American

    Great observations, but were are the cost savings ideas Mr. Dorso?

    I’d like to see all areas of State spending studied, big and small,

    For instance, rent and leases on office buildings all over Fargo.

    Job service has one building, Work Comp in another, the Tax dept has office space, in another building on and on, look in the phone book to see all these agencies scattered all over the metro area. These leases all give profits (dirty word I know) to the landlords and also indirectly pay property taxes, which in a round about way the state pays property tax to the county and school district. Why not construct a building on a parcel of NDSU on State owned land, to house all the state offices in Fargo? While the upfront costs would be there long term, I believe we’d save the state money. Perhaps we could also cut a few salaried positions by hiring students as interns and give real work opportunities at the same time.

    Social services should be moved from the county level to the state, make those employees all state employees and shift all the admin and office (see above) expenses to the state. Cass Co. just spent who knows how many millions of dollars expanding the courthouse, when with social services moved to a state building, they might have had ample room. The counties really have little leeway in how the services are spent or enforced as it is mostly state and Federal law anymore, why not cut a layer out and make it all state?

    I’m sure there are dozens of other little things the state can do, perhaps some day Rob could just have a suggestion box thread.

    thanks for the Post Mr. Dorso, you give an interesting perspective to the state Governance.

  • Bill Bully

    This idea makes too much sense. It will never fly with the attitude we have in Bismarck. Realize the thinking in Bismarck is “If we have Revenue in our grasp we are obligated to spend it”. In the next breath you will hear “If we give it back to the taxpayer we’ll never get it back and the Good Lord knows we know how to spend it better than anyone else we can think of”. Then comes the caveat among Legislators, “By spending it we are in a sense giving it back to the great unwashed (the rabble so to speak). Legislators with lobbyists at their elbow have a reduced respect for the tax base that counts, the average taxpayer. We seem to strive to a level of spending sophistication that we do not need and ultimately will not be able to afford, i e. California et al.

  • Baffled

    Mr Dorso, why are cities always the bad people when the percentages of the pie are very small compared with school districts. Is it because it is easier to pick on an entity that doesn’t have children involved? Just asking.

  • sbark

    Do I read this right………..quote– Basically the larger a subdivision’s mill levy the bigger their chunk of the pie. Municipal park boards were playing the game as well as cities, counties and townships.
    That means, every political entity has incentives to maximize their local property tax demands, which then in turn helps them get more from the state, and always without zero based budgeting, in which a “cut” is really just a slow down in the growth of spending.
    Govt has set itself up to grow exponentially in both spending and revenue.

  • kevindf

    Dalrymple and his fellow travelers lollygagging on the state payroll are just lazy and greedy.

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