John Hoeven Finally Gets Behind Tax Relief?

According to some of my friends in-the-know, Governor Hoeven is announcing today a $500 million income and property tax relief plan which is clearly intended to undermine support for the Americans for Prosperity ballot measure to cut income tax rates by 50% and business income tax rates by 15% (a measure Hoeven has opposed in the past).
So what does this tax cut consist of? I haven’t seen the details yet, but as soon as I do I’ll update this post.
Personally, I’m glad the Governor is finally talking about tax relief. I’m just sorry it took so much pressure to get him moving on this. We should have had substantial and meaningful income tax relief in the last legislative session.
Update: Here’s the details on the tax relief plan via fax machine (because the Hoeven campaign is apparently still living in the 1980′s).
First, the plan will provide $300 million in “direct property tax relief” by giving that amount of money to localities for education funding on a per-student basis. The localities only get that money if they cut mill rates to provide a similar amount of property tax relief. The Hoeven campaign is expecting this to average out to a 75 mill cut across the state.
Second, the plan cuts income tax rates for individuals. There is a 20% cut for the lowest income bracket and an 8% cut for the highest income bracket. Why they couldn’t just go with an across-the-board reduction of income taxes by a set percentage (the AFP measure cuts the rate on all income brackets by 50%) is beyond me. Apparently, for some politicians, no policy is a good policy unless is panders to the class warriors.
Third, the plan increases school funding (because no tax relief plan is complete with out an increase in spending!) by $100,000,000.
What I see wrong:
First, this plan seems needlessly complicated. Instead of this convoluted path to tax relief it would have been a lot easier to make an across-the-board cut in income tax rates and then tell the people that property taxes are a local problem. Which isn’t something citizens are going to like to hear, but by demanding that the state fix property taxes instead of asking it of local political leaders whose out-of-control spending has created the problem those citizens have invited this plan from Hoeven. And if you look closely, this plan limits the amount of revenue localities can raise from property taxes.
If this plan passes we lose a significant amount of local control. That’s not a good thing, but that’s what we get when we ask the state government to fix local government problems.
Second, there’s no tax relief for businesses. Which is absurd. Governor Hoeven created a new state agency called the Department of Commerce when he was first elected and that agency has an approximately $80 million budget for the purpose of creating jobs. But when Hoeven announces tax relief he can’t give businesses, the people and organizations that actually give people jobs in this state, some tax relief?
That’s just stupid.
Third, why does Governor Hoeven want to increase school funding by $100 million? It seems to me that over the last decade we’ve seen a 30% increase in school funding in North Dakota and a 16,000 drop in statewide enrollment. Meanwhile, analysis of standardized test scores tell us that 78% of our graduating seniors aren’t ready for college.
Throwing more money at our schools isn’t going to fix something. I wish Governor Hoeven realized that.
Update: The digital version of the press release is finally up on Hoeven’s website.