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Measure 2 fails: North Dakotans vote to keep property taxes

Poll results from the North Dakota Secretary of State website

FARGO -- North Dakota's property tax revolt appeared to fizzle at the polls in early primary election returns Tuesday night.

As of 11:23 p.m., Measure 2, which sought to eliminate property taxes, was badly trailing, with 76.5 percent rejecting the proposal and 23.5 percent favoring, with 93 percent of precincts reporting.

The prospect that oil-rich North Dakota could be the first state in the nation to cast off property taxes attracted national attention, but a cool response from voters.

Those backing the proposal, pushed by a group calling itself Empower the Taxpayer, argued that the $812 million a year in local property taxes collected statewide could easily be replaced by oil and sales taxes.

"As long as you're paying a property tax, you never truly own your home," Del Ruff of West Fargo, a Measure 2 supporter, said before Tuesday's vote.

But Keep it Local, a broad coalition of schools and other local governments, as well as business and farming groups, opposed Measure 2, saying it would usurp local control.

"People did a good job of getting both sides, for and against it, out there, but I think they thought this was too much of an over-reach and the vote reflects that," said Rep. Shirley Meyer, D-Dickinson. "What this has done is generate discussion, and I think legislators have gotten the message that something needs to be done to address property taxes, which have gone up annually at a rate of 7.7 percent. If you're on a fixed income, that can be difficult to deal with, so I think the taxation committee with bring forward some ideas to help, like a homestead tax credit."

Opponents also complained that Measure 2 was overly vague, leaving it to legislators to "fully and properly" fund obligations for 2,100 local governments throughout the state.

Measure 2 would amend the North Dakota Constitution to eliminate the property tax and leave it to the Legislature to replace the revenues.

The property tax, which opponents said is especially burdensome on elderly with fixed incomes, is an important revenue source for schools, cities, counties and other local units of government.

The campaign to eliminate it comes as state coffers are bulging with oil and sales tax revenues, with projected reserves of $5 billion.

But state officials have said cautioned that most of that money is obligated in special funds.

­Implementing Measure 2, legislative analysts have said, would require more than 400 pages of new laws.

Even opponents of Measure 2, including former Gov. Ed Schafer and former Lt. Gov. Lloyd Omdahl, said the property tax has problems and is in need of an overhaul.

Legislators have provided property tax relief, and increased state support for public schools, in recent years.

Although oil and gas revenues are gushing, many officials said it would be a mistake for governments to rely too heavily on such a volatile revenue source, which fluctuates with oil booms and busts.

In light of Measure 2, politicians of both parties predict that it is likely that lawmakers next year will be under greater pressure to provide more significant property relief.

Otherwise, many agreed, there will be another attempt at the ballot to ease or eliminate the property tax. No state has eliminated property taxes.