House Says No To More Sales Tax Revenues For Western North Dakota

North Dakota’s policymakers keep insisting there’s no east/west political divide in the state, but that was hard to tell from a political debate over a bill to divert more state sales tax revenues to western communities.

The bill is HB1344, introduced by Rep. Gary Sukut (R-Williston), and would increase the share of sales tax revenues with western communities. Sukut argued that some western communities are getting a tiny share of sales tax revenues compared to the taxable sales they produce. Referring to Tioga, Sukut said the city gets “$128,000 back with over $1 billion in taxable sales.”

The bill is “just asking that we give an additional two percent back to fix an inequality,” he said in support of the bill during the floor debate.

But Rep. Craig Headland, Chairman of the House Finance and Taxation Committee, disagreed saying his committee “believes that sales tax revenues belong to the state.”

I think he makes a valid point. I’m not very sympathetic to the plight of, say, the City of Williston when it comes to sales taxes given that the city chose to raise their local sales tax and dedicate the revenues to their parks district (resulting in that now infamous city-owned water park). Watford City is contemplating the same maneuver, as is the City of Minot.

Meaning that these western communities are griping about not getting their fair share of sales tax revenues even as they use their local sales taxes to build vanity projects like water parks.

“Ask Fargo twenty years ago if there was maybe inequality in the tax policy back then,” Rep. Headland said on the House floor. Again, that’s a solid point.

At what point do we expect local control to mean local responsibility? Too many western North Dakota leaders seem to think the solution to their revenue issues is to lobby for a bigger chunk of the state’s pie. Politically, that’s the easy button. They don’t have to make any hard decisions about raising local taxes, and can blame the state for being the bad guys if they don’t send enough money along.

Sukut’s bill is the latest example in a long line of policies which aim to shift the obligation for local spending to the state budget. We’ve done that with property taxes, with the state permanently taking over the obligation for funding the majority of local education, and now western leaders want to do it with sales taxes.

Enough is enough. These locals need to make the tough decisions about taxes and spending locally, and quit looking for a bailout from the state. It shouldn’t be that local governments fund luxuries with their revenues, while demanding funding for needs from the state.