House Committee Threatens Property Tax Reform

During the State of the State address to a joint session of the Legislature, newly elected Governor Doug Burgum declared the state will no longer pursue the 12% property tax buy-down. Legislative leadership was open to the shift in policy because they said, they would provide permanent property tax reform through a state takeover of funding social services administered by the counties. In essence, they sold it as a trade-off that would accomplish a $275 million per biennium reduction in property taxes. That reform is now in jeopardy.

The House Finance and Tax Committee (believe me, I’m tired of talking about the actions of this committee, but they’re consequential to your personal finances) has adopted an amendment to SB 2206 which will turn this property tax reform into a study. “Death by study” is a saying used in the legislature when members don’t want to outright vote against an idea. Instead, they turn it into a “study” and kick the can down the road. That may be the case here since this very topic was studied over the last two years and debated in the legislature before that.

READ: WITH NEW BUDGET FORECAST LOOMING, PROPERTY TAX REFORM MAY BE IN DANGER

Where does that leave the promise of property tax relief for this session? The voters were explicitly promised by the Republican leadership in the August special session the Legislature would shore up the money to ensure the 12% buy-down. This regular session isn’t over yet to accomplish that. The Legislature can push back on Governor Burgum’s declaration of eliminating the program and fulfill their promise of maintaining the full 12% buy-down especially if the social service take over is scrapped. I wouldn’t be surprised to see an attempt to phase out the 12% buy-down over the next few years instead of outright eliminating it.

If you’re a property owner, you’ve likely seen a line item on your statement showing how much tax relief you’ve received from the state. That is because legislators mandated by law for that line item to be there. They wanted to make sure you knew to credit them for their actions. I wonder if that line item can change to show how much your property taxes have raised due to the state’s inaction if nothing is passed this session? I won’t hold my breath.

READ: THE BUDGET SHORTFALL WAS CREATED BY THE LEGISLATURE IGNORING ND VOTERS

“Have you seen the budget? We can’t afford it!” are the panicked shouts we’ve heard from lawmakers since the revised budget forecast earlier this March. Make no mistake that is their choice. They’ve made the poor decisions with the checkbook. Decisions that have placed out-of-state special interests above hard working North Dakota residents. People should be outraged that working North Dakota homeowners are facing increased property taxes while we send over $15 million per month to Oklahoma and Texas-based oil companies. Be sure to watch your property tax statements.