Income Tax Cuts/Property Tax Spending Passes Senate, But No Real Tax Relief

People are emailing me from the legislative session saying that the much-debated income tax cut/property tax spending bill has passed and will go to the House for confirmation (I fully expect the bill to be confirmed) and then on to the Governor for signature. This is a victory of sorts given that income tax cuts were included int he bill, and the good people on the right side of this debate who fought for them should be commended, but looking at the larger picture here all we really did was maintain the status quo.
In the last legislative session, the much-hyped solution for property taxes by Governor Hoeven was a bill allowing paid property taxes to be deducted from income taxes. After two years, that legislation is now sunsetting and is being replaced by income tax rate cuts in the current bill, along with hundreds of millions in additional state spending at the local level that is supposed to reduce property taxes for school districts. But won’t, really, because local officials can just raise property taxes for things like parts and/or raise valuations on homes to keep your property taxes right where they’re at now.
So, at the end of the day, one form of income tax relief is being replaced by another form. The end result for most taxpayers in the state will be no real change in what they pay in income taxes.
Meaning that none of this is really tax relief at all. North Dakotans are getting more state spending at the local level with no guarantees that property taxes will go down along with income tax rates that are only marginally better than what they were already getting.
This is really more about the big-government types in Bismarck being able to claim that they’re passing tax relief without really cutting taxes at all.
Proponents of the Measure 2 income tax cuts on the last ballot warned that if North Dakotans didn’t reach out and take tax relief for themselves that the politicians wouldn’t give it to them. Turns out we were right.