Look carefully at Measure 2GLENBURN, N.D. — Measure 2 needs to be carefully looked at before the June primary. I don’t like paying taxes more than anyone else and I think North Dakota’s real estate or property taxes are higher than needed in view of the state surplus situation. However, eliminating all property taxes as proposed is not the answer.
By: Ronald Hensen, Agweek
GLENBURN, N.D. — Measure 2 needs to be carefully looked at before the June primary. I don’t like paying taxes more than anyone else and I think North Dakota’s real estate or property taxes are higher than needed in view of the state surplus situation. However, eliminating all property taxes as proposed is not the answer.
Why would we want to give the gift of no property taxes to out-of-state property owners? Counties are mailing tax statements to Canada and the United Kingdom and other locations worldwide. Their gain will be our loss. According to “Common Ground,” a publication of the North Dakota Association of Counties, out-of-state property owners own 2.3 percent of the residential, 15.6 percent of the agricultural and 37.3 percent of commercial property resulting in $7.7 million paid on residential, $29.2 million paid on agricultural and $89.9 million paid on commercial properties by these out-of-state owners.
It looks ridiculous to pass a measure that would relieve $126.8 million in taxes now coming from out-of-state owners and pass this burden to our residents to fund. Local residents would now need to pick up the funding tab for infrastructure supporting property owned by nonresidents. We are already sending the rental dollars out of state and now proposed to let the tax dollars stay out of state. What a generous Christmas gift. Obviously, these people would be laughing all the way to the bank.
The measure states that revenue will be provided “according to a formula devised by the legislative assembly to fully and properly fund the legally imposed obligations of the counties, cities, townships and other political subdivisions.” What these obligations would be are not spelled out. This is a hornet’s nest. Courts will need to interpret this statement. I do not think there is a legal requirement in state law to provide police and fire protection. What would happen to these services is unknown.
Replacing lost revenue
Replacing revenue lost by Measure 2 cannot be dependent on oil as a forever replacement. Increasing sales taxes and/or income taxes are not friendly to bringing in business or tourist trade. Somehow, the $800 million lost by property taxation would need to be replaced.
Supporters of the measure say there will be more local control if passed. They say the local entities will have complete control of how the funding the state sends is spent. This may be true but who decides how much is sent? Just because a township or school submits its budget that may include funding for a road building or repair project or a school project that locals would or have approved, there is no guarantee that funding will be approved and sent by the state. Obviously, budgets would be inflated and the state would be the one to decide who gets what. This is not local control. Don’t forget that the government level providing the funding is the level setting the regulations. They would carry the purse strings. If you want local control on roads, fire protection, schools or whatever service, Measure 2 is not the answer. Measure 2, as proposed, would definitely relinquish local control and does not adequately supply replacement revenue to the entities receiving tax monies. Compounding the problem is that Measure 2 is retroactive to Jan 1, 2012.
The fear of losing one’s home through tax foreclosure is an argument used by those favoring Measure 2. Since homes do not normally generate revenue, what about granting a property tax exemption to homeowners on the first $100,000 to $150,000 of valuation? This would give relief to those most in need of help and in some cases eliminate their tax completely.
Measure 2 supporters do have some valid concerns, however, there has to be a better way of handling this situation. Vote no on Measure 2.
Editor’s note: Hensen is a retired farmer/rancher from Glenburn, N.D., who still lives on the farm.