Shocker: Soros-Sponsored “Non Partisan” Group Doesn’t Think North Dakota Needs A Tax Cut

Who would have guessed that a bunch of George Soros-backed liberals masquerading as a non-partisan think tank would conclude that taxes shouldn’t be cut?
The Center on Budget and Policy Priorities (which we posted on previously here) has released their criticism of North Dakota Ballot Measure 2 which would reduce personal income taxes by 50% across all tax brackets, and 15% for businesses. You can read their report here.
I’m going to list their summary points below and respond to each.
First:

Measure 2 is risky and short-sighted. Measure 2 would cost the state a very large amount of revenue — some $400 million per biennium, growing indefinitely into the future — that normally goes to K-12 schools, colleges, universities, public safety, health care, and other services. This amount matches or exceeds the entire increase in General Fund revenues that the state is now experiencing as a result of the energy- and commodity-price-induced economic boom. When the current economic boom ends, the loss of such a magnitude of revenue is likely to undermine funding for schools, infrastructure, and public services.

First, it’s worth noting that the majority of public funding for North Dakota schools comes from property taxes. Second, the state currently has a $1.2 billion budget surplus. Third, state income tax revenues are still trending upward. Taking $400 million per biennium ($200 million per year) out of our big and growing state budget surplus is hardly going to jeopardize state services which are already sufficiently funded. But if you think state services aren’t sufficiently funded, we have enough money to both cut taxes and increase funding.
Which is something both of our Governor candidates have suggested doing. CBPP is trying to use a scare tactic here. “Cut taxes and our schools and police officers will run out of money!” Sounds scary, but it isn’t true.
Next:

Measure 2 is imbalanced and would prevent broad-based tax changes that could benefit all North Dakota families. The change would affect only income taxes, which are already very low in North Dakota compared to other states. The great majority of the dollars lost to the state would benefit a small number of well-off households; many families would get nothing at all. Measure 2 would do nothing to address other parts of the tax code which are more significant in North Dakota, such as property taxes, sales taxes, and other taxes paid by lower- and middle-income families.

Saying that Measure 2 is imbalanced is ludicrous. It’s represents a 50% cut in all North Dakota income tax brackets. Now, granted, that 50% cut translates into different dollar amount tax reductions because different tax brackets consist of different income levels and different rates of taxation. Someone paying a higher rate on a larger amount of income will get more of a cut in dollars than someone paying a smaller tax rate on a smaller amount of income even though the rate cut is the same.
CBBP is trying to obfuscate this reality by just concentrating on dollar amount cuts, which is ridiculous. Everyone gets the same rate cut. But cutting rates means people who pay a higher rate get more of a cut. That’s fair.
The final summary point from CBBP is pretty much the same as the first, which suggests that if we cut taxes the politicians will have less money to spend.

Measure 2 would foreclose efforts to address the state’s real needs. To compete and succeed in the long term, North Dakota — like any other state — needs high-quality schools, strong universities, up-to-date infrastructure, and a good overall quality of life. The increased revenues that the state is realizing due to its current economic boom — estimated at $363 million in the current biennium — could be devoted, in part, to addressing goals like improving teacher training, making college more affordable, supporting small businesses, improving supports for the state’s working families and senior citizens, paying off the state’s unfunded liabilities, reforming the state’s tax code, or some of those items in combination. The surplus is probably not big enough to do all of those things, of course. But by spending almost the entire surplus on a big tax cut, Measure 2 would prevent the state from making any of those investments.

Like the use of that word “foreclose?” Kind of jumped out at me. It’s a neat trick, using the terminology of the nation’s housing problems to scare North Dakotans away from a tax cut.
But regardless, the CBBP doesn’t really bring out anything specific here that’s a significant spending priority for North Dakota. We all want good schools. We all want good colleges. But is increasing spending on these things really the answer? Seems to me like things are pretty good in North Dakota as is. Despite school enrollment that’s falling by thousands of students every year, we’ve increased school funding by something like 30% over the last decade. So why should we spend more?
Plus, who is to say that we can’t give North Dakotans some income tax relief and do some spending? I’d agree that there are some infrastructure challenges the state legislature needs to address (particularly thanks to the increased oil traffic going on in the western part of the state), but with a $1.2 billion surplus I think we could absolutely do both.
What we can’t do, what we shouldn’t do, is just leave that whole budget surplus in the state treasury so that the legislators can invent ways to spend it. That would be a mistake, but one the CBBP (being a big-government, big-tax organization) absolutely wants us to make.