So Jack Dalrymple Is A Property Tax Extremist Now, Right?

Corral Creek Oil

“This is an extremist measure and we think it should go away,” said North Dakota Chamber of Commerce President Andy Peterson about Measure 2 on the June ballot earlier this year. “Can I say this any more directly? This is not the right thing for North Dakota.”

That measure would have abolished property taxes in North Dakota, and replacing those revenues with state appropriations. Peterson was one of the most vicious critics of the bill, railing against it and insulting its proponents every chance he got. His group was also the primary force behind Keep It Local ND, a coalition group started to oppose the measure (and expunged from the internet the moment the measure was defeated). As their name suggests, their primary argument was that it is too “extreme” to replace local property tax revenues with a state appropriation because that would require local officials to lobby the legislature for their needs.

They won that argument. Measure 2 went down in flames.

But now Governor Jack Dalrymple, in his executive budget delivered to the state legislature, is proposing a $714 million appropriation to local governments to replace local property tax revenues. Here’s what Dalrymple proposed in his budget address:

In the last biennium, we reduced property taxes by $342 million through a reduction of approximately 75 mills in school district levies, simultaneously raising the state’s share of school funding. In this budget we are proposing that we increase the state’s share of school funding again and provide even more tax relief to our citizens by lowering the property tax in an average school district by an additional 60 mills. Altogether our taxpayers will save $714 million in property taxes from both mill levy reductions. Furthermore, we are proposing that the total property tax relief for the upcoming biennium be made a permanent part of the state school funding formula and the local share of the cost of education be permanently reduced. This level of property tax relief is sustainable far into the future and is what the people of North Dakota want.

So, the North Dakota Chamber of Commerce, the North Dakota Association of Counties, the North Dakota League of Cities and all the other groups who opposed Measure 2 because it was “too extreme” will now be attacking the governor for his “extreme” proposal, right? After all, with most school funding coming from the state under this proposal, wouldn’t local leaders have to go to the state to fund their needs?

Of course, the local governments are eating this up. Not only is Dalrymple giving them an enormous windfall from the state’s coffers, but he’s leaving the property tax in place, allowing local governments to continue taxing away. We might see a temporary reduction in local property taxes (in exchange for an enormous new obligation for state spending), but as we’ve seen with previous state buy-downs of local property taxes, it will only be temporary. The growth never stops, as this chart showing the “blip” in property tax revenues around the time of the first property tax buy down in 2007 shows:

At best Dalrymple’s plan re-sets the property tax down a lower level (in exchange for shifting a huge amount of local spending to state revenues). But it would do nothing to hold off costs. Local taxing entities would be free to continue growing property taxes as they have in the past until, in a decade or so hence, we’re right back where we are now only with more state spending obligations.

We’d be better off doing nothing on property taxes than doing this.

Rob Port is the editor of SayAnythingBlog.com. In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters. He writes a weekly column for several North Dakota newspapers, and also serves as a policy fellow for the North Dakota Policy Council.

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  • kevindf

    My property taxes went down $52.61. Whoopdeedo.

    • borborygmi

      bitch, bitch, bitch. …..

    • borborygmi

      waahhhhhhhhhhsniffle, sniffle, waaaahhhhhhhhh

      • kevindf

        Is your state compensation as much as what the Cory Fong household enjoys?

    • Robert Frost

      Hey, that’s $52.61 toward your enormous state income tax burden. Take your wife out to dinner.

  • Bret Stiles

    We don’t need a property tax bailout, we need government to REDUCE SPENDING

    • http://sayanythingblog.com Rob

      Well said.

  • matthew_bosch

    Where is the State’s revenue for the buy down derived from? This is just moving the money from one column over to another. There is no reduction. Unless it comes from increased Oil revenue, which according the Keep It Local, was an irresponsible/unreliable revenue source.

    The only problem with Measure 2 was that it was a public referendum of whether North Dakotans were apathetic to burdensome taxes.

    • borborygmi

      Hate to have the public have a say in anything?

      • matthew_bosch

        The public was scared into thinking property tax elimination equates to elimination of public services. They voted to maintain public services. This is understandable.

        The “spenders” in state govt will equate the failure of M2 as a referdeumn by the public for increased spending and taxes, not the responsible maintenance of current public services.

        This is the problem. The forum for tax elimination should’ve have been the legislature not a public measure.

        • http://sayanythingblog.com Rob

          I’m beginning to sour on measures, but to be fair, this property tax mess was created when the legislature, at the behest of Hoeven, stuck is noise into this mess.

    • kevindf

      Rep. Kathy Hawken, who masquerades as a Republican, got a sweetheart buyout of her riverside mansion, and bought a golf course condo along with pocketing the rest, tax free.

      • JW-American

        To be honest, if you read though all the buyout amounts the Hawkins didn’t get any better or worse deal than any of their neighbors.

        There is a formula and by law or regulation, they stick to it pretty damn close. You may not care for her passion for Higher ed spending, thats her deal, but you cannot have your own facts on their buyout.

        • kevindf

          Why does she masquerade as a Republican? She voted “no” to decrease the state income tax last session.
          She and her ilk are just self-serving and greedy.

    • http://sayanythingblog.com Rob

      Where is the State’s revenue for the buy down derived from? This is just moving the money from one column over to another

      We’ll have to see how the legislature ultimately does it, but we can assume it will come out of the state’s general fund revenues. Since money is fungible, that means revenue streams like sales taxes, income taxes, etc.

      And if revenues fall of, the state will still have this obligation, so that would mean statewide tax increases to follow through.

      You’re exactly right in saying that this is a shift from one column to another. It’s not tax relief at all, especially when it leaves the property tax in place (albeit diminished) to continue growing as it always has.

  • NDSiouxFan

    Rob – A school district levy is part of the total property tax that is paid. I think that Dalrymple’s proposal to shovel state dollars to school districts should help by reducing the levy that school districts impose. They are not obligated to reduce their levy. The State is counting on the local school boards to reduce their levy, and thus reduce the total taxes a property owner must pay. If the school board does not reduce its levy, they will be answering to the taxpayers in the next school board election. The Measure 2 proposal was to eliminate ALL property taxes, and provide funding by the State. Dalrymple’s proposal (from what little I know about it) applies to just the school district funding part. Counties, townships, park districts, weed control boards, etc are still on their own to get funding through the property tax. Since school district levys have traditionally been the largest component of the property tax, any reduction in that levy should be noticable on the property tax bills.

    • http://sayanythingblog.com Rob

      You’re saying ask this this like you think it improves what the governor is offering.

      When has run away property taxes made local voters want to kick the bums out in the past?

      This is measure 2. Except halfway and without the quality of being rid of the property tax.

      But hey, North Dakotans love being bamboozled with schemes like this.

  • sbark

    So basically he is doing for Education what Obama wants to do on a national scale.
    State money……..and keep property tax in place…………it’ll be spent within 3 months, and they’ll be asking for more…….
    it’s what govt at any level does………..it cannot comprehend leaving a surplus.
    There has only been 2 exception in the last 100 yrs………..Dept of Agric in this decade.–they turned money back to the Fed Treas.———them damn farmers

  • borborygmi

    Rob , I am trying to figure this out, Are you complaining because property taxes going down or because they didn’t want to eliminate them permanently? I am supposing that oil revenues are in play. I would like to see the mechanism offered when oil revenues eventually peter out. Siouxfan has the rest of the story that you apparently felt didn’t have a bearing on your post.

    • http://sayanythingblog.com Rob

      I’m complaining because long term property taxes will still go up, while the state is stuck with this huge obligation for local schools.

      Meanwhile hypocrites like you who were oh-so- concerned about local control apparently seem not bothered by this at all.

      I’m beginning to wonder if you even understand the issue.

      • borborygmi

        With me it was as as mbosch put it . The vote was a referendum on keeping or getting rid of public services. The state under Measure 2 would have been stuck with a huge obligation for local schools, ( as a part of the constitution more difficult to change) so that shouldn’t be part of your argument unless you are arguing against yourself. Yes property taxes will go up in the long run as long as people want services.

        What next the “it’s not fair argument”. Tough year Dalrymple in, Obama in Sen still in dems control . Heide in Berg out. Hoeven not in control of you and yours. The establishment politicians pretty much running rough shod over conservatives state wide and nationally.. Measure 2 down in flames. NO one was kicked off the Bison, Good-bye Fighting Sioux, you can’t dig any dirt up on Dorn… Oil taxes didn’t go down or become more simplyfied, and the oil industry didn’t collapse despite your dire warnings.
        What is a Libertarian Conservative to do….. Kramer is the only bright spot.

        • http://sayanythingblog.com Rob

          I’m not even sure I really follow what you’re talking about.

          Yes, Measure 2 shifted local funding obligations to the state, but it also eliminated the property tax. Dalrymple increases state obligations while leaving the property tax in place.

          That’s the problem. And you must have a lot more money than I do, because I’m not nearly as unconcerned about future tax increases as you are. Our communities are growing. Why aren’t these expanded tax bases (and the expanded revenues that go with them) enough to fund the growth in need for public services?

          • borborygmi

            “[Our communities are growing. Why aren’t these expanded tax bases (and the expanded revenues that go with them) enough to fund the growth in need for public services?”] This is a good question. If I am following the gist of your question, property taxes shouldn’t go up because there is more property or at least more developed property which is taxed at a higher rate. I guess that it then comes down to costs and what services your property taxes are paying for. Are you including specials in your property tax or just the property tax?. Specials will be one time charges for infrastructure which are rolled into your property taxes.

            I live in a modest home in N Fargo and specials are paid for (the last being sewer separation). For my two thousand dollars I support a public school system which has done well for my family. I couldn’t get the same education for my kids at a private school for three times what I pay. I have fire protection, police protection and an up to date infrastructure. The roads are drivable, the water comes into my house the sewage out and my garbage is picked up on time.

            If someone wishes to build a bigger house in a ‘newer part of the town and they pay more than I pay in property taxes and specials that is their choice. They know or should know what the costs are going to be. Costs will always go up just do to inflation which is caused by national or international forces not local.

            Costs still should be managed, services looked into with a decision made by the people or our representatives whether those services are essential. Privatization or gov’t control would have to be the real question on controlling costs. For profit or bureaucracy. I guess I don’t see the mystery in all of this. IF you build grand you pay for grand, if you build modestly you pay for modestly.

          • http://sayanythingblog.com Rob

            Obviously, costs aren’t being managed, or people wouldn’t be so perpetually pissed off about property taxes.

            And the governor’s plan does nothing to control costs. It shifts spending obligations to the state, while leaving the property tax in place.

            Look at the chart above. See the dip? That’s the first property tax buy down. And property taxes have continued to grow every year since even despite subsequent buy-downs.

            This only exacerbates the problem. The legislature never should have taken this up. We should have left it a local problem, to be settled by local governments.

          • borborygmi

            [The legislature never should have taken this up. We should have left it a local problem, to be settled by local governments.] I am confused now. Measure 2 was going to give this to the legislature, but now not a good idea?

  • jimmypop

    “Local taxing entities would be free to continue growing property taxes as they have in the past until,”

    its none of grand forks business how much fargo spends if fargo voters approve to tax themselves or elect people that tax them to the moon. how cant you ‘conservatives’ get this thru your heads?

    the state should focus on reducing their taxes and spending. they wont because they cannot take credit for it EVERY YEAR if they cut sales tax or income tax.

    • http://sayanythingblog.com Rob

      But you’re wrong Jimmy. Now that the state is bailing out property taxes, it is the whole state’s problem how Fargo spends money.

      And you supported this.

      • jimmypop

        ha! nice response…..or whatever that was.

        your town should have nothing to say at how high we want to tax ourselves. what a conservatives position should be is this; the state should have nothing to do with bailing out property taxes. they should be lowering sales and income.

        anyway, its a blast seeing you argue how THIS is wrong when you wanted to do this with EVERYTHING.

        • http://sayanythingblog.com Rob

          But you didn’t say tax yourselves. You said other towns shouldn’t have any say how Fargo spends its money.

          Except, under Dalrymple’s scheme (and the statewide property tax schemes before it) we’re using statewide tax dollars to fund Fargo spending.

          Now we get a say. You guys should have “kept it local”

          • jimmypop

            uh, what?

            “if fargo voters approve to tax themselves”

            anyway…. youre argument, however weak, holds water only if i was actually saying we SHOULD have our kings passing money back to us the way they do. i think the ideas they have now are wrong…for the same reason why your measure 2 was wrong….. no money should come back from bismarck. the state needs to stay TOTALLY out of our business. unlike measure 2 where they would control EVERY cent. of course up until the last couple years…. that would leave you paying for yourselves…..ha! yeah, that was gonna happen.

            the state should cut income or sales taxes. leave the money in my hands to begin with. the way they are doing it is shameful and is done intentionally to be self serving.

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