Image: Why Your Property Taxes Are So High

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A few weeks ago I contacted city officials in North Dakota’s four largest cities – Fargo, Grand Forks, Bismarck and Minot – and requested the amount of property tax value that had received a discretionary exemption from the government (as opposed to mandatory exemptions for schools, churches, etc.).

The number I got back was $810,000,000 for just those four cities. That’s a huge amount of property value that’s not taxed because of exemption, and the obvious conclusion is that a lot of the reason why there is so much upward pressure on the property taxes those of us without exemptions pay is because so much property value has been taken off the rolls.

Opponents of abolishing property taxes – the proponents of the government handing out property tax exemptions only to specific, often politically well-connected businesses – have poo-pooed the idea that exemptions are creating a problem, often citing that exemptions make up only 3% of property taxes.

I’m not sure how they arrive at that figure, but this photo (taken by Measure 2 supporter Charlene Nelson) of a map hung up in Valley City’s municipal offices shows in yellow all the property in that city that has been taken off the property tax rolls:

Obviously, some of that may be the churches and schools and the like that get mandatory exemptions, but not all of that yellow area is mandatory. A good deal of it is discretionary.

Only the people who own property in the white areas are paying property taxes in Valley City. The rest are exempt. And I’m sure this pattern is emulated in pretty much every municipality in the state.

We’ve narrowed the property tax base so much it has become a problem. Measure 2 would put every property owner in the state on the same footing by turning all of North Dakota into a yellow zone.

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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  • $8194357

    What?
    A level playing field?
    That would be truly aweful now wouldn’t it…

    Special “protected status” laws from Democratic socialists 
    in an “Equal” under the rule of law Republic?

    But doesn’t the “leftist rhetoric claim” fair and level?
    So why do they push divide and seperate?

    Just one of those “false claims” that are in reality 180 degrees opposite of that rhetoric that the lefitst ideogies been deciving folks with for decades and decades and decades and decades and……

    Go figure huh ….

  • The Fighting Czech

    Is there a website with info on Measure2?

  • banjo kid

    If any one is waiting for a clear answer to this from a politician I got news for you , you will rot away before you get a clear answer,. 

    • $8194357

      The devil got their tongues for sure, Banjo..

      Miinds, hearts and souls as well for those who “know” the agenda like Alinsky did…

  • http://www.mswoods.com/ Mike Woods msWoods Real Estate

    After reading this, I’m going to find out about real estate tax exemptions in the Indianapolis, Indiana metro area. How did you find the map in your post above? I’d like to find something similar for my market.

    • Roy_Bean

      North Dakota has open records/open meetings laws that make this information relatively easy to get.  Someone took the available information and started coloring a map. 

      This measure seems to be attracting attention outside North Dakota and it’s a new angle on a national problem.  We, as a nation, seem to be looking for Robin Hood.  We want someone to steal from the “bad” and give to the “good” and we all figure that we are “good”. 

      On a national scale we have said that those who don’t make much money shouldn’t have to contribute to the expense of running the country so around half the population no longer pays income tax and many of them get a “refund” of money they didn’t pay in.  Now in North Dakota we have people who say that people who own property shouldn’t have to contribute to the expense of running the state or the county or the city or what ever political subdivision they live in. 

      At some point this has to end.  If I have a right to live in my house and not pay taxes do I also have a right to have water piped to that house for free?  Do I have a right to have a sewer to take waste water away for free?  Do I have a right to have a paved street, free of snow and potholes for free?  The expense of any or all of these could cause me to lose my house if they are priced too high. 

      The problem isn’t where we collect the taxes, the problem is out-of-control spending at all levels of government.  Taxes are the symptom but spending is the disease. 

      • http://www.mswoods.com/ Mike Woods msWoods Real Estate

         Thanks for the update. Government spending is definitely out of control.

        • $8194357

          All over America…

      • sdlawrence

        No doubt, Roy, and I think something most people are forgetting, or don’t even realize:

        We The People of North Dakota ARE THE STATE. There is no “other” to it. It’s US.  And that state – namely ALL OF US – is taking in BILLIONS more than we need to meet our budget, with plenty left over for pork parties that are now picking favorites and excluding the people in common themselves – the people who actually created the State for their own “common” good, and who are the only ones who matter.

        Our property taxes are not needed. Neither are our state income taxes. 

        Right now every discretionary (special interest) exemption in North Dakota (way over $1 Billion in property statewide) gives more than just a free ride for those who receive them.  It’s more than just the money they don’t pay. MUCH more.  It’s a double-whammy, as it’s a decided competitive advantage against those who do pay, and every exemption given shifts that much more of the burden onto those who have no connections, no meaningful representation, and no meaningful recourse.

        Meanwhile, all our governments, state and local, are doing nothing but rev up their whetted appetites for more growth and more out of control spending. 

        It is time to stop the insanity before it really is too late. We must nip this insanity in the bud with a resounding YES on Measure 2.

        • Roy_Bean

          I’m afraid that measure 2 is like taking asprin for a brain tumor.  It will relieve your headache for a while but it won’t cure the problem.  These out of control local governments will just pass sales taxes and income taxes to replace the property taxes.  Then they will increase the price of water, sewer, garbage, pet licenses, building permits, speeding tickets (like Fargo did) and the spending will go on and on.  We need a measure to limit what government can spend money on. 

          • sdlawrence

             I agree, Roy.  Measure 2 is not a panacea for government reform, nor should it be.  It may not force the legislature (state or local) to do anything differently, as only the voters are in a real position to stop these morons who keep managing to get elected from seeking out yet more ways to screw over the people they seem not to care a whit about.

            The one thing Measure 2 does accomplish, however, and it’s an enormous step in the right direction for me, is pulling ransomed homes and farmlands out of the state/local no-accountability spending spree crossfire. That’s huge. 

            What M2 or anything else does or doesn’t do to after that, and how government is reformed after that, is completely secondary to what Measure 2 does for the people who ARE the State, and gave it Constitutional life in the first place, but have nothing but burdens heaped on them. All so that state government can continue to tax, spend and ignore, even while local governments (and the friggin ND Chamber) fight to keep the only Local Control and power they really care about – and that’s the power to give exemptions (real economic advantages). 

          • $8194357

            Starve the beast…
            it feeds and grows larger off the peoples money…

        • $8194357

          by jove I think he’s got it…
          good call sd…good call….

      • Drain52

        Which is why we need to turn the tap off. If they do raise other taxes, at least it will be a tax that everyone pays and everyone pays the same rate–not a tax that exempts some, makes some pay more, some less and is so confusing no one can understand what is happening. Whatever tax we have it should be fair, equal and transparent. That’s not property tax.

        • $8194357

          Fat governement leeches suck the money from the people…

          They feed off of others “in the name of” neccesary services”

          but grow fat and bloated as they keep sucking the lifes blood out  of others…

      • $8194357

        Ecellent diagnosis at the end their Dr. Roy.
        .
        Any followup advise on how to make the overspending patient follow Dr.orders?

  • ec99

    People don’t have a gripe with paying taxes for basic services (police, fire, water, sewage, schools, parks).  It’s when the money goes to appease the whims of a few (events centers, dog parks, health centers, golf courses) that there is objection.  This has been the modus operandi of Grand Forks for years.  Also, the system is screwed up.  The people who determine the mil rate also determine the value of the house.  Thus, when more money is needed, one or both go up.

    • Joeb

      To a point. But in Williston where a defeated measure was slapped back on the ballot with a fancy propaganda campaign, we now spend another 1% of our income on “parks and recreation”. That may not seem like much, but when your county beat Fargo in sales tax collections for the past year, it translates to $20,000,000.00 for ‘swingsets’.

      In reality, there is a new ‘recreation center’ being planned with a half million gallon swimming pool, other pools, waterslides, and a surf simulator. (yes, a surf simulator).

      That’s just the aquatic fun… but at some point, the maintainance of this megafacility will fall back on the taxpayers, as will staffing, etc. There is already a 7.5% sales tax, and property taxes have gone up–not because the rates have increased, but because the valuation of homes not even on the market has jumped with the housing shortage here.

      Those who planned to retire here are finding that between losses sustained to whatever savings portfolio they had, and increased taxes, the pinch is on.  

      If you have paid for your home, you should own it, period, not live under the threat of losing it to taxes. Other services are something the cities bill for anyway, and street repairs fall under special assessments.

      The bottom line is that if government is running a surplus, then it is taking in more money than it needs. The inevitable temptation to spend that money will prevail over common sense, and the thought that it is OUR MONEY, not “government funds” that is being spent on wildeyed projects like surf simulators.

      • ec99

        I don’t disagree.  That’s what got Prop 13 passed in CA; the state had billions in surplus and kept upping the taxes.  All of those who benefit from the property tax will come out against it, including plenty of fear.  I hope the voters are smart enough to recognize that.

  • http://www.technispace.com/ Technispace

    nice article on property tax.

  • Lynn Bergman

    Voters, please check out my Dakota Beacon article discussing Implementation of Measure 2 at length and in detail, showing how your county may fare with a well thought out “infrastructure based replacement formula”:

    http://dakotabeacon.com/entry/lynn_bergman_implementation_of_north_dakota_measure_2/

    If you desire either a Word or PDF version, just e-mail me at [email protected] until a PDF is available on the Dakota Beacon website.

  • Lynn Bergman

    Property Tax Discussion:

    Mayor and council: How much is there?
    Assessor: this many dollars are “ours” on February 15th.
    Mayor and council that are not up for re-election: Let’s spend it all.
    Members of council up for re-election: Lets reduce the mills by five so we can say we lowered taxes.
    Assessor: That may threaten our raises?
    Mayor and council: Don’t worry, just make sure all of you government employees vote for us and we’ll “take care of you”. And our “economic development” recipient friends will fund our campaigns. Everybody wins!
    Taxpayer: I wonder why property taxes are so high? I guess it just happens…

    • Joeb

      >Members of council up for re-election: Lets reduce the mills by five so we can say we lowered taxes.Assessor: That may threaten our raises?<<

      Members of Council: "Don't worry, we'll just raise assessments."

      One of the arguments for the 1% sales tax in Williston was a property tax cut.
      The day after the first try at the 1% additional sales tax failed in Williston, yes the day after the election, I got a notice of reassessment which raised the value of my property 40% due to "market factors".

      These had to be printed and lined up for delivery at the post office before the vote went down, or they could not have come in the mail the following day.

  • awfulorv

    Prior to Prop. 13 the California legislature demanded the states credit card limits be increased each year. Without Howard Jarvis, and Paul Gann,  the citizens of this state would owe seven or eight trillion, I kid you not.  All sensible Californians should rise and bow their heads in honor, whenever they hear, or read, the names of these rather ordinary men who did the right thing and, in doing so, became Giants.

  • Robertfrost

    So now Rob is an expert in Valley City property taxes.  Maybe the council there should fix their own problem, as in furthering annexation and widening the tax base.  It is a local problem with a local solution. 

    The last I checked, cities are governed by city officials.  If the tax base is a problem, those officials should be voted out, not have the problem handed off to the next body.

  • Guest

    as i read more about this the more i dislike this proposal and the more crazy the anti-tax/ anti-government folks looks.

    take out schools, churches, universities, city hall, fire stations, etc and how much of that map is actually left being yellow?

    just tell the tax payer, ‘here is what is going to happen; we are going to switch from property taxes to income taxes. what do you think?” and let the voter make an educated choice. do you want target and sears to get free fire protection? do you want the snow birds that claim a home in arizona to pay no taxes here, but gain all the services? how about guys that own hunting land? should they get a free ride? what about the big oil companies that are blessing (and in some ways wrecking) our state. should they get a free ride?

  • Eglass

    Assuming your figure of $810 million in property exempted is correct: in order to get taxable value I think you cut in half and then for residential take 10% and for commercial I think 9%. Thus the taxable amount would be about $38 million. That’s about 4% of the total property taxes collected statewide by all local governments in a year. These are approximate figures but they are close to the 3% claimed by opponents of Measure 2. While this is not nothing, it is not much. So if you owe $3000 on your house, you might pay an extra $90 because of exemptions. But what you are forgetting is that some (but not all) of the exemptions built BECAUSE of the exemptions…and that in two years or five years they come on the tax rolls and help all of us pay at that time and forever going forward. My figures are approximate but I think they’re pretty close. Eliot GlassheimGrand Forks City Council member 

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