North Dakotans Aren't Asking The Right Questions About Supposed Property Tax Relief

I was happy to see this headline run in the Fargo Forum today.

It’s gratifying to see skepticism of the state buy-downs of local spending we’ve been calling “property tax relief.” There are a lot of reasons to be skeptical. Heck, there are a lot of reasons to believe it isn’t really tax relief at all.

What’s aggravating is that in the article, reporter Mike Nowatzki doesn’t seem to ask anyone the most pertinent question: Where is the money for the property tax buy-downs coming from?

The answer, of course, is the taxpayers. The money for the property tax buy-downs isn’t coming from some magical pot of gold at the end of a rainbow. It’s coming out of the income and sales and other taxes we all pay for the state. Which is why Democrat Assistant House Minority Leader Corey Mock admitted to me recently in an interview that the “property tax reilef” isn’t tax relief at all. “Our proposal to lower property tax obligations by increasing the state share of K-12 funding is best described as education and property tax reform,” Mock told me.

Indeed. Because the state’s approach to property tax reform since 2009 has been little more than shift in spending.

And, of course, the local government and their lobbyists in Bismarck love it. The state is taking huge amounts of spending off their plates, hiding it in the statewide budget surpluses, while leaving them free to continue raising property tax to fund spending in other areas.

That’s a great deal for local governments. It’s not such a great deal for the taxpayers. This may look good on paper now when the state has a windfall in property taxes, but remember that this plan obligates the state to a big chunk of local spending going forward. An obligation that won’t disappear should the state’s surpluses evaporate.