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Monday, June 28, 2010

DUSTIN GAWRYLOW: PROPERTY TAX GAP BEING FILLED BY CITIES, COUNTIES , AND PARK BOARDS

Statewide, school taxes decreased 28.3 percent due to the property tax relief bill (SB2199) adopted in the 2009 legislative session. City property taxes increased 4.3 percent and county property taxes increased 8 percent for an overall state property tax decrease of 12.6 percent.
 
District 36 2008-2009 property tax comparisons are the following:
Dunn County had an overall average decrease of 16.1 percent. School taxes decreased 32 percent, city taxes increased 1.6 percent and county taxes decreased 7.1 percent.
 
Stark County had an overall average decrease of 12.6 percent. School taxes decreased 32.2 percent, city taxes increased 5.2 percent and county taxes increased 8.4 percent.
 
Hettinger County had an overall average decrease of 14 percent. School taxes decreased 32.4 percent, city taxes increased 9.9 percent and county taxes increased 4.7 percent.
 
In just the first year, the state bailout of school property taxes have been cut in half, or more, by cities, counties, and park boards.
Simple: tax relief without reform is nothing more than a bailout of local government. 
This is what NDTA testified to during the 2009 legislative session (SB 2199 refers to Senate Bill 2199 that eventually became the tax relief/bailout plan):
 
  • SB 2199 fails to address the real problem which is a lack of mill levy reductions to counteract property valuation increases.
  • SB 2199 fails to address the issue of spending at the local level outside of education.  (Note:  State funding for Education increased by 50% over and above inflation in the last 15 years, while enrollment has declined by 20%.)  
  • SB 2199 fails to prevent cities, counties, and parks from filling the property tax void left by the state-funded property tax relief.
  • SB 2199 fails to limit future spending increases as a condition of receiving this new state money, allowing the status quo that created this situation to continue.
 
The next legislature will be faced with a choice: 

1.  Continue to throw state tax dollars at local school districts while other local officials do nothing to curb the spending that creates high property taxes.

2.  Crea
millste actual mechanisms to at least make it politically uncomfortable to allow this to keep happening.

...or...

NDTA has been discussing actual reforms with state legislators. 
Many have agreed that the best way to apply some friction to property taxes is to amend the local budget formula to require that when valuations go up X%, the mill levy automatically goes X%.
Local governments would have the option to raise taxes, but they would have to vote to do it. 

This proposal would not tie local officials from raising property taxes, so long as they go on the record as doing such.

If your property taxes go up, your local officials should be on the record one way or another.
 
 
 
For more information contact:
 
Dustin Gawrylow
North Dakota Taxpayers' Association
701-751-2530






P.S.  The North Dakota Policy Council has started holding Property Tax Forums around the state.  Their next one is in Grand Forks on June 30th.  Click here for more details.

Click here to email your elected representatives.

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