Don’t Let Local Property Tax Hikes Be Automatic

“City property taxes are going to go up.”

That’s what Blake Crosby, executive director of the North Dakota League of Cities, told me during a radio interview this week. His argument is that lawmakers dabbled in property tax policy, implementing buy downs of local property taxes funded by statewide surpluses, but did so without an “exit strategy” for when all that extra money dried up.

There’s truth in that, but why should the state’s budget problems mean automatic property tax increases locally? Is it not fair, given the major post-oil boom budget correction the state just went through, that we expect the same sort of reform locally?

When Mr. Crosby says taxes are going up, does it mean they have to go up? Or that local leaders are going to use the state budget situation as an excuse to raise taxes?

[mks_pullquote align=”right” width=”300″ size=”24″ bg_color=”#ffffff” txt_color=”#000000″]…we shouldn’t let ill-conceived tax policy at the state level be a blank check for profligacy at the local level.[/mks_pullquote]

One thing which is not making local leaders look very good is news such as this from the City of Minot, reported by the Minot Daily News earlier this week.

“A proposed pay plan would add $869,006 to employee salaries in the City of Minot’s 2018 budget,” reporter Jill Schram wrote.

“The proposed compensation plan shows an increase of 3.67 percent in base payroll, not including benefit costs. This compares with a 4.21 percent increase or $987,989 in the 2017 pay plan and 5.5 percent or $821,744 in 2016,” she continued.

Those are some aggressive increases in payroll. Particularly that 2016 payroll increase which came after the state began to grapple with serious revenue downturns during the 2015 session.

Are these justifiable?

Obviously, not all communities in our state are following this trend on spending, but it’s worrisome that some are. Particularly when the attitude among local leaders seems to be that property tax increases are going to be automatic.

They shouldn’t be automatic.

There is plenty of valid criticism for the Legislature. They simply spent too much money back when the oil boom, and high crop prices, were pumping revenues into state coffers. They also implemented property tax policy, the buy downs, which simply wasn’t sustainable long term. That’s on them.

But we shouldn’t let ill-conceived tax policy at the state level be a blank check for profligacy at the local level.

“I believe that the political [subdivisions] need to trim their budgets too,” Senate Majority Leader Rich Wardner told me during an interview on this subject back in April.

He’s right.