ND City Attempts To Give Walmart A Property Tax Break The Company Doesn’t Need

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Written By:
Rob Port

Aug 6, 2012
4:57pm

Over the last year the State of North Dakota has had a lengthy and in-depth debate about property taxes, inspired by the presence of a measure on the June ballot to abolish property taxes. The measure failed, but what the debate has exposed is the fact that a lot of North Dakotans are very unhappy about their property taxes.

Supporters of abolishing property taxes such as myself made, in support of the June measure, an argument pointing out that a big reason why property taxes are going up is that local governments keep narrowing the property tax base through exemptions. Often these exemptions are handed out as special economic development deals to particular businesses. These businesses come in and use taxpayer resources but don’t pay the same property tax everybody else pays. This puts upward pressure on the property taxes paid by those who don’t get an exemption.

While the businesses in question may eventually pay property taxes, in the short term it creates problems. And since local governments are always handing out new exemptions, the problem is persistent.

Case in point, the new Walmart in Mandan. Tonight that city’s commission will vote on whether or not the retail giant should get a property tax exemption to build there. According to former Mandan city commissioner Thomas Kelsch, “Walmart is coming to Mandan whether the city gives Walmart a property tax exemption or not, so if Mandan does give the exemption it is just like throwing away $700,000 or so of public monies that Mandan could use for infrastructure repairs and maintenance.”

You read that right. Walmart is apparently not asking for this exemption. The company is coming to Mandan whether they get the exemption or not. So why is the city trying to give tax dollars away? Are they really that foolish? Are they so egotistical that they must have hand out a special economic development deal, even in a case where one isn’t necessary, just so they can take credit for the development?

Regardless, Mandan gives us a clear example of what’s wrong with property tax policy in North Dakota. It’s not just that the property tax is expensive to administer, and an affront to property rights in general, but that it’s used as a tool for special political deals and crony capitalism.