Those opposing Measure 2 (the Initiated Measure to abolish property taxes, signed by almost 30,000 North Dakota voters) are imitating Chicken Little. They’re claiming that abolishing property taxes will effectively end civilization as we know it. All their claims are based on fear and none on factual information. In fact, the language of Measure 2 answers most of the concerns we’ve heard expressed regarding abolition of property taxes.
Opponents are manufacturing outrageous and foolish hypothetical’s calling them “unintended consequences”. “There are too many unforeseen, unintended consequences to this measure”, they say. “It’s too confusing, too complex and if you make a false move, things will be much worse. So don’t you worry your pretty little heads by voting for this measure. Just vote “no” on this measure and let us wise, farseeing sages take care of the problem of property tax for you.”
What they are not saying is that since 1981 there have been more than 131 state legislative changes to property taxes. Of course, these same people tell us that property taxes are locally controlled. If that’s the case, why do we have a “State Supervisor of Assessments and Director of Property tax Division for the Office of State Tax Commissioner? Or, why has the State Legislature passed more than 131 laws directing how property taxes are assessed, imposed and managed since 1981? Or, why is there a State Board of Equalization if property taxes are locally controlled?
I’m not sure what crystal ball those opposing Measure 2 have that makes them so much wiser than the citizens of this state. However like any rational, thinking person, we can rely on past experience, common sense, economist’s studies as well as the law and Constitutional authority to anticipate and predict the actual impacts of abolishing property taxes.
The prophets’ of doom and gloom’s first scare tactic is: “Abolishing property tax is too drastic. Cities and counties will dry up and die if they can’t tax property. Let us reform it instead.” But here’s what the past teaches us: The legislature has amended, tweaked and reformed property tax 134 times in the past 30 years. The result? A more complex system, more shifting taxes away from special interests onto the shoulders of middle-class taxpayers resulting in more spending and more taxing. You don’t need a crystal ball to know that if we leave property tax reform in the hands of the legislature we’ll get more of the same.
Another lesson from the past: North Dakota abolished personal property tax in 1965. That’s right, the state used to tax you for your washer and dryer, TV, car, shoes, furniture, every bit of personal property you owned. But some bright person decided to bring North Dakota out of the Dark Ages and abolish that tax. And guess what? The state found ways to compensate and continue services and there were no increases in any other taxes to do it. They did it once before, they can do it again.
Here’s another bogeyman from the prophets of doom: “What if the oil wells dry up? Without property tax the fallout would be catastrophic.” Well, we know that when the oil wells dried up in the 80’s, it was devastating to the state. Since the state’s economy is built on oil and agriculture, when oil was knocked out from under us, hundreds were left jobless and were forced to sell their homes. But if we abolish property tax, our state’s economy will no longer depend primarily on just agriculture and oil for revenue. An economic study done by Beacon Hill Institute (read the entire study at our website: http://www.empowerthetaxpayer.com) shows that abolishing property tax makes the entire state an Economic Development Zone and will attract a wide variety of new businesses and industry to the state. This will result in new revenues that will more than make up for the lost property tax revenue.
So let’s say the doomsayers are right and in 10, 15 or 20 years the oil wells dry up. What will happen if we don’t abolish property tax? We will have a repeat of the 80’s bust. But if we do abolish property taxes and the oil industry tanks, our state will have a much broader and more diversified economic base that can more easily absorb the displaced oil workers and the revenue from oil. And none of them will lose their homes for inability to pay property taxes.
Here’s another scare tactic from the opposition: “Oh, we don’t want to be like Minnesota, where they are cutting funding to cities and schools.” There are two big differences between Measure 2 and what’s happening in Minnesota. First, Minnesota’s buy down of property tax was a legislative action that is undone as easily as it is enacted. Measure 2 is a constitutional amendment that binds this and all future legislators to permanent property tax abolition. And second, Minnesota places special interests above essential government services when it budgets; that is why they are cutting funding to schools but building a stadium for the Vikings. Measure 2, by contrast, mandates that the state funds the legally mandated services (roads, fire and police protection, courts, etc) and schools first, before it funds anything else.
So if the state faces lean years and there’s belt tightening, it won’t be at the expense of schools, roads and essential governmental services. If something needs to be cut, the legislature will have to defund the horserace commission and our hundreds of millions in subsidies to non-resident college students before they cut school or local funding.
Keep in mind that the Measure 2 opponents are not concerned about well-being of the citizens. Their first concern is keeping a steady stream of revenue coming into the coffers, even if it drives homeowners out of their homes, even if it discourages business, even if it makes serfs out of all of us. They want the status quo, which is to put the homeowner at the mercy of the state.
Don’t believe it? Again, look to the past: when the elderly lost their homes, did they abolish property tax? No, they instituted the Homestead Credit, which shifted the tax burden away from a few and onto the shoulders of other taxpayers. When businesses wouldn’t build because of high property taxes, did they abolish the tax? No, they gave a tax exemption to a select few and again put the burden of lost revenues on the shoulders of the rest of us. When property owners would not improve or repair their properties because it would result in increased taxes, did that give them pause? No, they created Renaissance Zones so that a select few could improve their property without penalty.
At every turn, the response has been the same: shift the burden onto someone else with the threat of losing your home if you don’t pay the increase in taxes. But never, ever let this revenue stream run dry, no matter the economic, social or personal cost to business, citizens and communities. It’s time for the citizens of this state to be free of this unfair, unreasonable and unfixable tax.