Measure 2 May Lower North Dakota Utility Bills Too

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Written By:
Rob Port

May 2, 2012
7:51am

Here’s an interesting development in the debate over Measure 2, which would abolish property taxes in North Dakota. Currently coal companies operating in the state pay a tax on power production in lieu of property taxes. Two of the state’s coal companies have, since January, been paying those taxes in protest preparing to recoup those revenues if Measure 2 passes since a) Measure 2 would be retroactive back to the first of the year and b) the taxes they’re paying are based on the property tax.

From the Associated Press:

BISMARCK, N.D. — Two electric utilities have paid almost $5.2 million in coal taxes under protest, arguing they won’t owe the money if North Dakota voters decide to abolish property taxes in the state.

Basin Electric Power Cooperative, of Bismarck, and Minnkota Power Cooperative, which is based in Grand Forks, are challenging whether they owe a “coal conversion” tax. …

Gary Spielman, Minnkota’s vice president for finance and administration, called the tax protest “pre-emptive” and necessary given what may happen if North Dakota voters agree to abolish property taxes.

“This is not an effort to say Measure 2 is right or wrong,” Spielman said.

Mr. Spielman goes on to say that his company is “concerned” that Measure 2 might upset their tax status quo. Translated, that means they’re worried that the legislature will tax them in some new way if Measure 2 passes, and they think the devil they know is better than the devil they don’t.

Valid concern, but think of it this way: Measure 2 could mean a significant reduction in tax burdens on North Dakota power plants which, in addition to the windfall of tax relief property owners would enjoy if the measure passes, could mean lower utility bills too.

Measure 2 opponents like to try and scare voters with innuendo about all the unforeseen ramifications of abolishing property taxes, but what they don’t talk about are all the positive ramifications that are possible too. This could be one of them.

It’s hard to imagine how a measure that would take $820 million in annual tax burden off the backs of citizens in a state running surpluses measured in the billions could be more bad than good.