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Wednesday, April 07, 2010


Bismarck - Today the North Dakota Policy Council filed a complaint on behalf of Erling Haugland against the City of Bismarck for violating tax increment financing laws. The complaint was served to Bismarck city attorney Charlie Whitman this morning and was filed in District Court in Bismarck.

The suit alleges, among other things, that the City of Bismarck has illegally held $15 million in tax increments that should have been dispersed to the general funds of the City of Bismarck, Burleigh County, the Bismarck School District, and the Bismarck Park Board. (Click HERE to read the complaint.)

The Bismarck City Commission plans to use portions of that $15 million for a quiet rail project and a parking ramp in downtown Bismarck. The Commission recently asked North Dakota Attorney General Wayne Stenehjem if the city could use tax increments to fund those items.

"The North Dakota Policy Council believes that Bismarck has illegally collected $15 million from properties located in the tax increment district in downtown Bismarck," stated NDPC executive director Brett Narloch. "That $15 million should have been sent to all taxing jurisdictions. The fact is that schools and citizens in cities that use tax increment financing have been robbed, leaving property taxes for most people 2.5% higher than they need to be."

The plaintiff, Erling Haugland, owns property in Bismarck and Lincoln all of which is in the Bismarck School District. According to Haugland, he and all other property owners whose property is not located within the TIF district are not being treated fairly by the city.

"Tax increment financing benefits a few people in downtown Bismarck at the expense of every other property owner in Burleigh County. If TIF is going to be used, the City of Bismarck needs to follow the law. I'm not necessarily against quiet rail or building a parking ramp. I just feel that the city has gone about these issues in the wrong way," Haugland said.

Tax increment financing is an "economic development" tool used by cities to renew their downtown areas. It falls under "Urban Renewal Law" in the North Dakota Century Code.

To learn more about tax increment financing, watch "Tax Increment Financing 101" and read NDPC Land Use Policy Fellow Randal O'Toole's article "TIF is Not Free Money."

The complaint and other case documents can be found online. The North Dakota Policy Council is a 501c3 nonprofit public policy research and public interest litigation organization whose work is made possible by the generosity of its supporters. Please click HERE to make a contribution.

Click here to email your elected representatives.


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