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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  • Captjohn

    I totally disagree with mr. Kingsbury’s conclusions. Whether or not it was then Gov. Hoeven or the legislature that started down this road is not material. Neither took into account the unintended consequences of this course of action.
    The legislature has tied the hands of political sub-divisions for decades. This has been the result of constituent pressure to keep rural property tax low.

    • Yukon

      Why can’t every property owner pay the same amount of tax and raise other taxes to come up with any shortfalls? I would rather pay a 10% sales tax than any property tax. Just once, I would like to pay a tax on what I use and not on what someone thinks my property is worth. I wouldn’t have to pay a premium for services that my neighbor gets at a lower price.

  • Captjohn

    Every political sub division should have the ability to elect leaders who minimize taxes and minimize services or tax and spend as the electorate chooses. If they want to pass bonding payed for out of taxes they have that option at the polling place.
    Should very school district provide pre kindergarten paid for by the taxpayers? Should every school district provide transportation to every student who demands it?
    Some people who aren’t farmers opt to live in rural settings so as to avoid city taxes for sewer, water, streets, sidewalks and all the attendant maintance. Is the state supposed to figure out how or what services each sub-division is going to be mandated to provide? When the majority of the money comes from Bismarck the logical step is to lobby the legislature to mandate the services.
    I was around long enough to watch the battles over the school funding formula that even the ND Supreme Court said was fundamentally flawed. The problem was always the mill levy deduct

  • Captjohn

    AG interests regarding property tax have driven the agenda for decades. This present situation is no different. As Kingsbury says tax the business property owner. They have no soul and certainly don’t have a vote. Urban voters will continue to pay property taxes because they want more services from the political sub-divisions. All in all North Dakota will get the kind of tax scheme it votes.
    I’d rather see the sales or income tax reduced then watch the unfair way everyone’s state revenue is distributed to land owners.

  • Ralph Kingsbury

    This blogger (Captjohn) who always hides behind his
    pseudonym destroys any validity to what he is trying to say by his continuing
    rants against rural property owners. In
    fact, if there is any value in what he writes it is demonstrated by the
    problems in trying to equate the difference in rural/urban living.

    There may be limits on assessing the marginal utility of the
    dollar, or even of the same item of purchase, but taxes on either are a lot
    more accepted by all but the most argumentative compared to property taxes.

    As for me, if there is one final argument against property
    taxes it is Charlene Nelson’s argument that you never ever really own your home
    as a failure to pay taxes means the government can take it from you. Your home
    is not your castle.

    Finally, it is not immaterial that someone who originally
    opposed the property tax buy-down, or whatever you want to call it, now writes
    as if he should receive credit for its success. Credibility and honesty have a
    very direct relationship.

    • http://sayanythingblog.com Rob

      Actually, Capt. John is pretty open about who he is. It’s John Dorso, former House Majority Leader and at times a SAB contributor.

      • Ralph Kingsbury

        I know John Dorso. Was a Republican party chairman (Chairman, not chair. Never in my life have I been a chair) when he ran for U.S. House. It does make a difference about who started the buy down. I will add though that as far as I have been concerned that should always have been regarded as a temporary first step fix. The urban ND legislator, regardless of party, has always used the property tax to make the rural people pay for more than their share. How can you ever run a government where the value of the taxable item can fluctuate 30 percent and more each year. One year the govt entity doesn’t have enough money to buy the office heat and the next time they somehow come up with the financing to build a 5000 seat hockey arena. Notice I said the financing, not the money.

  • JoeMN

    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
    ________
    You are unfortunately correct here
    This also applies to municipalities voting to place an inordinate amount of burden on local businesses
    But the same can be said by allowing the state to be the source of funding.
    And isn’t the state deriving it’s newly found bounty from these same out of state interests

    Plus local control is in essence lost.
    Inevitably it’s the state that will decide how these funds will be spent.
    We have the same rich county poor county syndrome here.
    But in a way, it’s this local control that incentivizes poor counties to become more business friendly.
    With state control over funding, county leaders need only focus their attention on Bismark.

    • JoeMN

      Perhaps a solution could be to only allow those with property tax liability to vote in these local elections ?

      • Ralph Kingsbury

        But then say a rich city of 20000 population or whatever Williston is wants to spend over $80 million on a “health club”, as I am told their new club cost them while at the same time telling the state they need more state aid for streets, well, don’t tell me that there is not a problem with the tax system we call property taxes.

        • JoeMN

          It would seem to me this is more an issue with big spending Republican state legislators.
          Are you sure you are not simply trying to mask a problem here ?

          • Ralph Kingsbury

            You find one place in any of my writing where I have masked anything. In serious tit for tat writing which I have done several times my “opponents” having complimented me on my straightforwardness and honesty in my writing. Your sophomoric charge offends me. Put some substance in what you say, and then say what you mean and mean what you say.

          • JoeMN

            I was hoping you would address why you believe Williston would be better off run from Bismark.
            Perhaps the “big spending” charge I made against ND Republicans is not too welcome in your circle, but I do tend to call them as I see them.
            But I have come to accept that big spenders, and the Republican party are not mutually exclusive.
            Here in MN, Republicans did their victory dance after the state shutdown in 2011, celebrating no new taxes, but with loads of new spending.

            The city of Williston spending 80 million on a boondoggle is one thing.
            We see it here all the time.
            But why must the state and Republicans stand ready to ride in for the rescue ?
            Let them eat sweaty towels.

          • Ralph Kingsbury

            And I expected you to show even one time in my writing where I was masking something, or anything.
            Would it be better run from Bismarck? Is it good the way it has been run locally anywhere for any time? Not from what I have seen. Are Republicans big spenders. In North Dakota take away the oil money they sent back to the locals (for everything-roads, schools, etc, etc.), take away the increase they sent to the local school district all around the state as the buy down, the big buy down. Take away the increase in state govt employees as in the sec of state’s office to address the additional business that has come with the economic boom, well show me where the wasteful spending is. All this was asked for by local school districts and county commissioners and the business people who stood for 10 hours in the hallways at the capital getting liscenses, permits, etc.
            Is there some waste? Probably. Almost impossible that some wouldn’t slip thru, but go thru what I just said and go out and live in the oil patch. Don’t just write about it in Mn. Go live it.
            As for me, my whole adult life I have been accused of being too conservative and I wear that with pride. I have been in the oil patch behind those string of semis as they are drilling on my site’s (my little share of those few sites) and I tell those people they have to let me get my oil. On the other hand, on my farm I knew I needed roads to make my farm work and the way the property tax system doesn’t work there is no way I am going to ask those people to live like that without doing at least all that has been done, and maybe more.
            Who voted for that 80 m club. Probably both property owners who have made big money off their property because of oil and local Williston residents with very little property who said for what I have had to put up with you property owners can give this to me, and that is another thing that is wrong with the property tax.
            And what next. Well, I am going to bed. Maybe continued tomorrow if you have something with validity to say.

          • JoeMN

            We know the property tax system is imperfect.
            However we also know a state government drowning in oil revenue is going to be just as imperfect.
            Want proof ?
            Just look to DC to see how “generous” even Republicans are with endless borrowed money.
            So go ahead and convince me how conservative you are.
            Sorry, but I remain unimpressed.
            Why are we surrendering the concept of self governance ?

            The answer to a growing local government is not for the state to consume it.
            The solution for big government is in local control.
            The states need to take back control it has lost to the federal government.
            And most decisions affecting day to day life should be made at the local level.
            This way if one juristiction (such as Williston) becomes too oppressive, or trades critical infrastructure for municipal health clubs, there is always the option of escape to another.
            However it becomes more difficult to escape a rogue state, and MUCH more difficult to escape a tyrannical country.
            THIS is what I thought conservatism was all about.

          • Ralph Kingsbury

            Calling Williston tyrannical is not being conservative. Not spending money is not being conservative. Not fixing a broken and inherently unfair system of taxation is not being conservative. Calling people names is not being conservative, and now as for me this is not a discussion and I really don’t care what you think, so good-bye-forever.

          • JoeMN

            You really aren’t all that interested in debating idea’s, are you Ralph ?
            Just advancing Republican branded big government.

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