Local Governments On A Spending Spree After State Bails Out Property Taxes

If you’re wondering why the North Dakota Chamber of Commerce has taken to the media to plead with local leaders to cut property tax mills, allowing property tax bills to actually be lowered for once, this is why: After the State of North Dakota appropriated nearly $900 million to buying down property taxes, local governments seem intent on gobbling up that “tax relief” with new spending.

In Minot, the city seems to be charting a course for a aggressive spending on new school buildings (something school officials say will offset all of the state’s property tax buy-down), and in Fargo city officials want a new city hall:

FARGO – City officials agree: the decades-old City Hall here is cramped, outdated and failing.

That’s why City Administrator Pat Zavoral wants to build a new City Hall, hoping to start construction perhaps as early as 2014, he told the Forum Editorial Board on Tuesday.

Many of the city’s departments are crammed into the current City Hall, which is about 24,000 square feet, Zavoral said.

A 40,000- to 60,000-square-foot building is ideal for the city’s growth, he said, based on a study the city did 13 years ago.

Adding that much space could cost between $8 million and $12 million, Zavoral said.

These are just two examples, but these are two of the largest taxing entities in the state. And I suspect that as the summer wears on we’re going to hear about more spending projects from local government that will eat up that much-touted property tax relief we got from the legislature.

As if buying down local taxes with state taxes could be called “tax relief.”

I guess we need to keep repeating it: You can’t accomplish property tax relief by pouring money on the people who are causing the property tax problem in the first place.

Maybe these projects are good projects, but the legislature didn’t intend for local governments to go on a spending spree because the state bought down property taxes. And this illustrates how the state’s approach to property tax relief will obfuscate local government accountability. If these are good projects, let the locals make the case to local taxpayers for the tax increases to pay for them.

By bailing the local governments out, all the legislature has done is clear the decks for more problem spending.