Legislature's tax relief package generates mixed reaction

BISMARCK -- North Dakota lawmakers delivered more than $1 billion in tax relief, but a backer of last year's Measure 2 says the Legislature failed to provide adequate relief or reform.

BISMARCK -- North Dakota lawmakers delivered more than $1 billion in tax relief, but a backer of last year's Measure 2 says the Legislature failed to provide adequate relief or reform.

Charlene Nelson, chairwoman of Empower the Taxpayer, the nonprofit coalition that pushed Measure 2 onto the 2012 ballot, said the Legislature only "set the clock back," arguing that it's temporary relief and only a matter of time until it's gone.

She also said there was no tax reform, which was the large focus of Measure 2, a citizen initiated measure to abolish property taxes. The measure failed in a statewide vote, but helped focus attention on the issue of taxes in a state raking in money from oil taxes and a booming economy.

Nelson said that property tax reductions won't make enough of a dent as property values rise and expects another effort similar to Measure 2.

"Once people get their bills next fall and see their taxes increase, there will be a measure," she said. "This will be an issue because the Legislature did nothing and in many ways made it much worse."


She said she already has received more than 20 phone calls from citizens who voted against Measure 2 who told her they realized they should have voted for the proposal.

"That tells me the people weren't too easily fooled," she said.

By the time they wrapped up early Saturday, lawmakers had passed $850 million worth of property tax relief, with $656 million through a new K-12 school funding formula and $200 million through a state-paid tax credit. And Tuesday, Gov. Jack Dalrymple signed a bill worth $250 million in income tax relief.

Deputy Tax Commissioner Ryan Rauschenberger said the tax relief package "is going to be a well-received, significant reduction in overall property taxes across the state," building onto the relief that was passed in 2009.

In 2009, the state passed a 75 mill buydown of school district property taxes.

Using the state average of 387 mills in a school district that received the 75 mill levy buydown, a $180,000 home property tax bill would be $3,135. Once the relief passed this year through school districts is kicked in, plus the 12 percent across-the board cut, that bill would be reduced to $1,868 -- a cut of $1,267, Rauschenberger said.

Rauschenberger says the new formula to distribute state funding for the tax relief is more transparent for taxpayers.

Once local political subdivisions calculate their property tax assessments, a 12 percent across-the-board cut will be applied to each final property tax statement. The county will then be reimbursed that 12 percent from the state tax department and distribute it back to each political subdivision.


Taxpayers will see on their next property tax statement a dollar amount that indicates how much the state paid the county for property taxes.

The auditor for the state's most populated county said Tuesday that the 2013 legislative session was a good session for taxpayers.

"While not all of them will be happy, I think most of them will think it's a good break and appreciate it," said Cass County Auditor Mike Montplaisir. "I think the tax relief they passed is responsible, taking into consideration the needs of both the state, local government and taxpayer."

Nelson says she fears that local property assessments continue to grow and taxpayers end up paying a higher dollar amount in taxes, despite being assessed fewer mills.

Property values are rising in growth areas of the state, especially the booming Oil Patch.

But Rauschenberger said local political subdivisions are seeing new residential and commercial property added to tax rolls that are helping spread out the cost of local government.

"Costs may go up, but you're also gaining more valuable land that is being developed," he said.

In the west, Dickinson City Administrator Shawn Kessel said the state did a good job providing tax relief.


He said revenues in Dickinson generated from property taxes jumped from $1.2 billion in 2012 to $1.86 billion this year, indicating a large increase in per property payments.

With a mill levy rate at 77, he said the city will still try to decrease the rate in the next year to make up for the increases in assessed land, and hopes the state funding will extend relief further.

"The state has stepped up to the plate to provide relief. Now we just have to make sure it gets to the residents," he said. "Our intent as a city is to not increase the mill rate for existing mills and live off the new construction in the community."

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