I mentioned this briefly in my post about Governor Dalrymple’s State of the State address earlier today, but I thought these comments about property taxes were noteworthy enough for their own post.
Since 2007 the legislature has been trying to tackle the problem of property taxes. In hindsight, I’d point out that the legislature probably should have heeded warnings from those of us who said that they never should have opened this can of words. But I digress.
The problem is that, while the legislature has appropriated hundreds of millions of state tax dollars ($752 million to be precise) to buy down property taxes (not really relieving taxes but just shifting the burden from the local level to the state), property taxes have continued to rise. As evidence, this chart shows the relentlessly upward climb of property taxes, including their rise after the beginning of the state buy-downs in 2007:
In a nutshell, the problem is that even as the state sends more more to the local governments, the local governments just tax and spend more.
For the coming biennium, Governor Dalrymple wants to double down on this approach to property tax relief. He wants to give local governments $714 million as part of a permanent, on-going buy-down of property tax mills related to school funding. Now, again, this is problematic in that we’re not really reducing tax burdens so much as shifting tax burdens from local to state. But even more problematic than that is Governor Dalrymple’s declaration, during his State of the State address, that local governments can go right on raising their local property tax mills after they get this windfall of new money from the state.
I’m glad the Governor cleared that up. Seriously. I was worried my local government was going to stop raising my taxes.
All kidding aside, what Governor Dalrymple is doing is ensuring that North Dakotans will see their state tax burdens increase (Dalrymple’s plan accumulates more school funding to the state level) while leaving the path clear for more property tax increases at the local level.
This is not tax relief.