Say Anything Blog

According to North Dakota’s media, North Dakotans don’t want a tax cut.  Yet during the election both candidates for Governor offered tax relief plans that included a cut in state income taxes.

Now state legislators are wondering why Governor Hoeven is following through on his campaign promise:

BISMARCK, N.D. (AP) Last month North Dakota voters soundly rejected a proposal to cut their state income taxes in half.

Gov. John Hoeven’s budget proposal includes a smaller income tax cut. And some lawmakers are wondering why Hoeven is emphasizing the issue.

Measure 2 on the November ballot sought to cut individual income tax rates in half, and corporate rates by 15 percent. It was defeated with 70 percent of the voters saying no.

Wyndmere Senator Jim Dotzenrod says high property taxes are a bigger issue with voters.

Fargo Senator Carolyn Nelson says the money devoted to an income tax cut maybe could be used elsewhere.

Hoeven spokesman Don Canton says the governor offered the income tax cut during the campaign as part of a more balanced package of tax relief.

So here’s what’s going to happen: Legislators are either going to let Hoeven pass his little bit of tax relief as cover for the massive 26% increase in general fund spending taxpayers are likely to get hit with this legislative session, or they’re going to abandon the idea of income tax cuts altogether (using the failure of the Measure 2 tax cuts as an excuse) and focus on yet another property tax scheme that will fail.

And it will fail.  Because property taxes cannot be cut from the state level.  Property taxes are a local issue, and are driven by local spending.  Until profligate local spending is put in check property taxes are not going to go down and it doesn’t matter how much money Governor Hoeven and the legislators spend to bail out that local spending.

The only way state legislators could cut local property taxes in a meaningful way is if state legislators took over local spending.  That’s not likely to happen, nor is it something we should want to happen.

What we should want is for local officials to stop their out-of-control spending so that property taxes can come down.  And if we want tax relief from the state level we should ask for it in the form of cuts to taxes the state legislature is actually in charge of.  Like the sales tax and/or income tax.

In terms of tax relief, I don’t think this upcoming legislative session is going to end well for North Dakotans.  They have been distracted by the idea that the property tax problem can be solved from the state level, and until that distraction ends taxes are going to remain high and our elected officials are going to continue spending every dollar in sight every session.