With Measure 2 defeated, voters still looking for property tax relief
Leading up to the primaries this summer, Measure 2, the provision to abolish property taxes in North Dakota, garnered a lot of vocalization, both for and against. The voters of North Dakota voted down the measure, but will still be looking for property tax relief in the next biennium, officials said.
Gov. Jack Dalrymple has proposed a plan to expand an existing program that buys down school district property taxes, allowing them to levy fewer mills, which in turn would lower residents' property tax bill, Tax Commissioner Cory Fong said.
"I'm sure that there will be some additional ideas along those lines," he said. "There's some ideas out there to completely take all of the school funding at the state level and basically have the state pay for school funding at the local level, and that gets translated as property tax relief."
District 36 Republican House Candidate Alan Fehr said Dalrymple's plan will set the stage for possible programs.
"It's a good start," he said. "It's taking a look at making some significant property tax changes. It's giving some money to the schools. We'll see how things shake out four months from now."
The school funding idea is easy on the taxpayer, Fong said. There is no application and the reduction is reflected in their tax bill.
"If we need more funding for schools and day cares and law enforcement, those are things you have to look at," said District 36 Democratic House Candidate Bev Berger.
Willing to take anything into consideration, she said the biggest concern with property tax relief or any bill would be tacking one issue on top of another unrelated piece of legislation.
As demand for housing has soared in the Oil Patch, so have property valuations, which have had residents scared of what their tax bill might be.
"Market is what drives values for residential and commercial property," Fong said. "And if your market's going up, if you're seeing like-sales and comparable sales that are increasing, that's going to increase the value of homes."
An increase in the value of the home does not necessarily result in an increase of property taxes, he said. It all depends on how local entities choose to use mill levies. Value is a way to spread the tax burden.
"I suspect that most of the legislators are going to have tax relief as one of their priority items," Fehr said. "I think the tone is one of, besides doing other things, let's get some tax relief in there."
Other states have tried to cap property values and it has had a detrimental effect on property taxes, Fong said.
There is a concern that the housing boom in western North Dakota could become a bust similar to what many American cities are facing, Berger said.
"When this all is done in several years, are they going to bring those property taxes back down to base level?" she asked.
Another proposal is a broad-based homestead tax credit for all residential properties, Fong said. The credit would apply to a primary residence.
"It would require regular, routine application," he said. "In other words, you wouldn't just get it, you'd have to apply, you'd have to prove that it's your primary residence. And so there are some logistical and some administrative issues that we'd have to deal with."
The homestead tax credit would only be for residential property, not rentals, not commercial and not agricultural property.
The 2013 legislative session will bring a lot of ideas to bring tax relief, property or otherwise to the table, Fong said.
"I'd have to look at it," Berger said of any given plan. "I'm new to this, I'm going to listen, but I'll be heard."