North Dakota State Tax Commissioner Circulating Misleading Information About Measure 2
A couple of state legislators forwarded to me the presentation below, which presents information about the impact of Measure 2 which if passed on the June ballot would end property taxes in North Dakota, which they said came from state Tax Commissioner Cory Fong. They were upset, and rightfully so, at some of the assertions made by Fong.
For one thing, in the presentation Fong makes several assertions about what would happen to tax policy if Measure 2 passes. Specifically, Fong claims that the state sales tax would double from 5% to 10%. He claims that the personal income tax would increase 279% over 2011 levels, and that corporate income taxes would increase 720%.
These are odd assertions coming from Fong, because the tax commissioner doesn’t set tax policy. Fong isn’t a policymaker, he’s an administrator. For him to say what will happen with tax policy is misleading (some might call it lying), because Fong has no control over any of these tax rates. These policies are set by the legislature.
Fong might be forgiven if he’d simply stated that abolishing the property tax would put upward pressure on other tax rates, which is arguably true, but that’s not what he said. He said that these tax increases will happen, and that crosses the line from informing the public to campaigning against this measure I think. And a public official using taxpayer dollars to campaign against an initiated measure would be a violation of state law.
I emailed Fong about the presentation, and he confirmed that it came from his office. He also said that “the tax shift estimates are for demonstration purposes only. They are not intended to imply that the state legislature would choose to shift the entire burden of property taxes onto only one other tax.”
Look at the presentation below. IF the intention wasn’t to imply massive increases in sales and income taxes were a certainty if Measure 2 passes, then I’m not sure what Fong was trying to imply. Because to a reasonable person it looks like fear mongering.
By the way, Fong makes allusion to North Dakota’s “three legged stool” of tax revenues, which are the sales tax, the property tax and the income tax. The argument is that if you shorten one of the “legs” of this “stool” the other legs must get longer. This is a specious metaphor, though, as the state has no fewer than 27 revenue sources all of which can be manipulated to absorb any revenue losses from Measure 2.
I understand that Measure 2 is very controversial, I understand that many of you readers feel it is bad policy, but if we’re going to have a public debate about abolishing property taxes it should be an honest one.