Eliminate property tax?

Voters in North Dakota may soon face an interesting choice at the ballot box this November, and not just between the various candidates.

Right now, efforts are underway to place a new initiative on the ballot, one that would essentially eliminate property taxes in the State of North Dakota.

The effort is being led by Republican Rick Becker, a former state representative and current candidate for U.S. House.

Becker and the initiative’s supporters are currently soliciting signatures to qualify the measure for November’s ballot. They have until late June to gather 31,164 signatures, and as of mid-January they already had half of what they need.

A website named “endpropertytax.com” has been created to support the measure, in which they explain how they believe the government could still function despite eliminating a large source of revenue.

According to the website, the State of North Dakota reports $1.5 billion in property tax revenue every year. Of that, $340 million is bonded debt, assessments and special taxes that would not be eliminated by the measure.

The remaining $1.16 billion in tax revenue would, meaning roughly that amount would have to be generated some other way, or the government risks not having enough funds to operate effectively.

Proponents say the money could easily be made up. A few of the options they present for doing so include cuts to property tax credits and to programs like Operation Prairie Dog, which allocates $250 million of oil and gas tax revenue per biennium to infrastructure funds.

In turn, Becker said local governments would receive funding from the state to make up for the lost income in property taxes.

Meanwhile, if a political subdivision decided it still needs more revenue, Becker said they could still levy a tax or fee on property owners based on parcel size, road frontage or the size and type of buildings on the property. But they would not be able to levy taxes based on assessed value.

“When passed, this measure will position North Dakota as the number one place for young families and businesses to relocate,” states Becker in a press release. “We will finally solve the problems of workforce development and economic diversification. In fact, when passed, the economy of North Dakota will soar, leaving the other 49 states behind!"

If passed, the effects would certainly be felt by local officials in Eddy and Foster County.

In Eddy County, revenue from property taxes accounts for over 43 percent of the general fund budget. It also accounts for 100 percent of the county’s funding for capital projects (Law Enforcement), 13 percent of their road and bridge funding, and 100 percent of the funding for their Veteran Service Officer.

Meanwhile, property tax revenue makes up 58 percent of the City of Carrington’s general fund revenue in their 2024 budget.

It’s a similar story for political subdivisions across the state, and opponents worry about what could happen to local services if their funding is dependent on what the state is able to divvy out to counties, cities and school districts that have suddenly lost more than half of their revenue.

North Dakota United – a union that works on issues regarding students, educators and public employees – has come out against the measure. So too has the N.D. Association of Counties.

“If North Dakotans vote to pass this, every county, city, school, park, ambulance and fire district will need to go groveling to the Legislature to beg for money for local needs,” states North Dakota United.

N.D. Association of Counties Executive Director Aaron Birst said about the proposal, “We have seen this kind of attempt before to eliminate property taxes. We are not convinced there is a workable solution that is equitable for funding the services the counties in North Dakota provide to serve the people who live and work in the county.”

The last time North Dakota voters took up elimination of the state’s property tax was in 2012, when voters struck down a similar ballot measure with 75 percent voting against.

Becker says his 2024 version of the measure addresses some of the concerns expressed back in 2012 that led to its failure, namely local control of finances and funding.

To address that issue, the following text was included in section 1 of the measure.

“The state shall provide annual property tax revenue replacement payments to political subdivisions in an amount equal to no less than the amount of tax levied on real property by the political subdivisions, excluding tax levied on real property for the payment of bonded indebtedness, during the calendar year in which this amendment was approved by the voters.”

In other words, a political subdivision would receive a payment from the state equal to the amount of property tax revenue they received in 2024.

However, local officials in Eddy and Foster County are skeptical.

Speaking on his own behalf, Alan Scanson – a Foster County commissioner – said he opposes the measure.

“Who in Bismarck is going to make the decision on how much money my county and my township receive? And if, in the course of years going forward, I need an increase in the funding to continue to provide services in said county or township, who’s going to make sure that we get that funding?” asked Scanson.

“Who’s going to make the decision when things get tough down in Bismarck, when the money’s not there that they’re thinking they’re going to generate?” he continued. “Does everybody take the same reduction if they don’t have the dollars?”

The concern Scanson articulated is shared by many who oppose the measure – that handing over the purse strings to the state government could prove detrimental to local services over time.

Eddy County commissioners Dave Gehrtz and Glenda Collier also said they oppose the ballot measure.

Collier said she appreciates the effort to cut taxes, but isn’t convinced the measure as it's currently written won’t cause unintended consequences on the local level.

“My biggest concern with this measure is the local control,” said Collier, who recently attended a presentation about the measure in Maddock, N.D. led by Becker.

“It’d be great to give our residents the tax elimination, everybody’s tired of paying property tax,” she continued. “But, I want nice roads to drive on, I want a sheriff, I want deputies available when I need to call them, I want an ambulance service when somebody needs to use it and I want a fire department.”

Collier said she spoke to a legislator at the meeting in Maddock, who told her this measure would take away local control similar to how the state took control of social services by moving to a zone configuration.

“There’s already a legislator that said they’d take the control away from us,” said Collier. “... if the state takes it and the state’s funding it, don’t worry, they’re going to take control of it too, and I can’t support something like that.”

Jamie Allmaras, Eddy County Commission Chairperson, said he was still in the process of learning about the measure and hadn’t yet decided whether or not he supports it.

Meanwhile, New Rockford-Sheyenne School Board President, Todd Allmaras, has also expressed his own concerns and opinions about the measure from a school leadership perspective.

“I find this proposal very concerning for all local services, especially schools. Although the details of how funding local entities would work is not at all clear in the proposal, it would certainly reduce and potentially eliminate local control,” said Allmaras.

“Equitable disbursement also becomes a concern for small rural N.D. schools and local government agencies as our larger population centers continue to grow and the balance of power shifts from a historically rural to a more urban base,” he added. “The State already has significant control in K-12 education, this proposal only furthers that and in fact removes any local funding authority. In time, the end result of this could very likely end up with your children and grandchildren riding a bus to Devils Lake or Jamestown to a state-run school or a totally online K-12 education system.”

As of press time, it was still unclear whether enough signatures would be acquired to place the initiative on the ballot, but the measure has been gaining traction in recent weeks and voters may soon have to decide how they feel about it.

To learn more about why proponents believe the measure is good for North Dakota, visit their website at endpropertytax.com, where a copy of the measure can be found and where Rick Becker has a video series in which he articulates his support for eliminating North Dakota’s property tax.