ND Legislative Committee Votes Down Bill That Would Have Ended Property Tax Exemptions

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Written By:
Rob Port

Sep 11, 2012
12:26pm

One of the biggest problems with property tax policy in North Dakota are property tax exemptions handed out by local government to promote economic development, among other things.  The problem with these exemptions is that they narrow the tax base.  Property that is exempted from the tax rolls still use the services that property taxes pay for but pay no or reduced taxes.  This puts upward pressure on property owners who don’t get the exemptions.

To fix this problem, legislation has been proposed that would have ended exemptions for tax increment finance districts, renaissance zones, pollution abatements and property improvements.  This would have the effect of broadening the tax base, allowing tax rates to come down, though it’s opposed by groups like the Chamber of Commerce.  The Chamber agitates for higher property taxes (most recently in Minot) and also fights to keep these exemptions in place, producing the end result of higher property taxes for everyone except politically well-connected businesses of the sort the Chamber of Commerce lobbies on behalf of which can get the exemptions.

Unfortunately, that legislation was voted down today by the legislature’s interim Taxation Committee by an 18 – 1 margin.

Rep. Roscoe Streyle (R – Minot) was the lone vote in favor of ending the exemptions.  You can see the other members of the committee here.

This may be a preview of the hostility any real property tax reform will face in the legislative session.  The committee may have killed this proposal, but someone (perhaps Rep. Strelye) will propose something similar in the coming session.  It will be interesting to see what level of support it gets, because it’s clear from rising property taxes around the state that the sort of “property tax relief” the legislature has created in the past isn’t solving anything.

The state obligating itself to a larger share of local spending is not tax relief.  It is a spending shift and will not reduce tax burdens North Dakotans face.