House Narrowly Passes Property Tax Bill, "Don't Know Why We're Tripling Down On A Bad Idea"

The House debated HB1319 today, which is the education funding bill that includes Governor Jack Dalrymple’s property tax reform. The reform is a massive shift of local school spending from the local governments to the state government which, by the logic of the legislation’s proponents, should ease pressure on property taxes.

But the bill barely passed, and some legislators tell me it may be reconsidered tomorrow on the very last day of the session. As it was, it barely passed on a 49 – 42 votes (48 votes were required for passage).

“If members of the assembly are going to vote green based on the idea of having this as a spending bill, I can’t argue with them,” Rep. Rick Becker (R-Bismack) said during the floor debate. “But the aspect of it being property tax reform is, I think, a misconception. The legislature tried that in 2009 with $250 million and in the eyes of the public it was a failure. In 2011 the legislature upped the ante to $375 million and in the eyes of the public it was a failure,” he said referring to the legislature’s previous efforts to buy down local property taxes. “I don’t know why we’re tripling down on a bad idea.”

Rep. Becker also questioned the long-term impact of the legislation. “What we have is a very, very temporary relief and yet we are on the hook forever,” he said referring to the fact that the legislation obligates the state to increased school funding while putting no restraints on local property tax growth. “The relief is temporary, but the cost is forever. Doing the right thing is more important than just doing something.”

House Majority Leader Al Carlson was also outspoken in opposition. “After listening to all the debate,” he said, “I’m not sure if this is an education bill or a tax bill.”

Carlson was also skeptical of the idea that the legislation will reduce property taxes. “Don’t tell me it’s property tax reform,” he said.

Like Becker, Carlson also referenced the legislature’s previous stabs at property tax reduction. “We’ve spent almost $800 million in the last three bienniums on property tax relief,” he said. “And what are the people still saying? Where’s the money.”

Put simply, HB1319 is a very expensive way to get a temporary reduction in property taxes by shifting local spending to the state. It’s bad policy, but unless the House can reconsider it and do something else, we’re stuck with it.