Kingsbury Column: Say What You Mean, Mean What You Say

Al-Carlson-Rich-Wardner-2-Feb-11-2013

Recently I wrote a column for Say Anything that, to put it kindly, suffered from a lack of clarity. Justifiably I got taken to task for it. On the same day a column written by the majority leader of the North Dakota House of Representatives also, in my opinion, suffered from a clarity problem.

My column clarity problem was based on, as one blogger charged, my wandering in my writing. The majority leader’s writing if not wandering certainly changed the subject. In its’ title he asked who was responsible for providing the funds for property taxes, the state government, or local governments.

He then began writing about property taxes describing them and the complexities in assessing and collection. He continued writing about the recent legislation that has led to the state government continuing buying property taxes down, or lowering the property tax burden as we say it now.

The article explained how the program worked and provided a thorough detail on the history. The one thing I noticed that didn’t follow the history as I remember it is he gave the credit to the legislature for its’ creation. As I recall it was Governor Hoeven who came up with the idea and in fact made the legislature come back the first time when they did not include the buy down in the budget and left Bismarck immediately.

The column never did answer the question about whose responsibility it is to collect those taxes? Should it be the state treasury through all their options like individual income taxes, corporate income taxes, sales taxes or any of the various oil taxes they have come up with. Or should it be the county treasury with real estate taxes?

Between the money provided for schools and additional state allocations the majority leader says that the property taxes should have declined by 31 percent. He then ask readers to see if they received a 31 percent reduction in the assessment on their property.

The majority leader assumes no possibility of the need for growth in local government. What happens in those areas where there is growth? What happens if a new school needs to be built? New roads? Flood protection? Any spending that needs to be made on top of the old levels. The way the legislature has designed the assessment system there is no direct relationship between increase in property value and increase in taxes collected.

Is there some “wasteful” spending? Undoubtedly. I don’t think it happens very often across the state as a whole. I would imagine a study of property tax changes would show considerably less than a 31 percent reduction in property tax collections around the state.

There is the fundamental question of how much spending of certain programs should be state spending and how much should be local. The best examples are schools and welfare programs. How much should the state support schools? Should someone living in rural North Dakota not receive as good an education as a student in Fargo or Bismarck simply because of where they were born? So too should someone born into a family made poor because of a job related accident not receive as much assistance because of where that person injured lived whether in Fargo or Stanley, or again a poor agricultural county.

If Cass or Burleigh county has a population that decides in an election that they want more roller derby opportunities should that be a taxable spending decision that the majority of voters can require the minority of property owners to pay for. That’s what the property tax system does. Especially it works good when much of the high valued commercial or industrial property is owned by out of state corporations. They are not real people. They have no soul. We don’t have to worry about throwing them out in the cold. Most of that property is owned by retirement accounts made up of people whose retirement payments have been substantially reduced due to the housing crisis. At a time when the North Dakota treasury floweth over. Does that make a difference?

So, is this clear? I think it shows what is wrong with property taxes and how the state government, especially the legislature continues to blame the problems on the county commissioners while “trapping” them in a system that gives them no way out.

Ralph Kingsbury

Ralph Kingsbury owns Kingsbury Economics. Specializing in statistical research his on line blog is free to readers. It is located at www.northernplainsstats.com. It contains statistics of North Dakota, and NW Minnesota. At the request of his readers it has a section on Grand Forks. It also reports on Montana, South Dakota, and all of Minnesota when appropriate to telling the story of the upper Great Plains both economically and culturally.

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