North Dakota Considers Eliminating Property Tax

[BlueStateSaint]

This is a new one . . .


North Dakota Considers Eliminating Property Tax



Keith Colville, who supports the abolition of property taxes in North Dakota, listened to a debate on the issue last month at a school auditorium in Edgeley.


By MONICA DAVEY
 
Published: June 11, 2012

BISMARCK, N.D. — Since Californians shrank their property taxes more than three decades ago by passing Proposition 13, people around the nation have echoed their dismay over such levies, putting forth plans to even them, simplify them, cap them, slash them. In an election here on Tuesday, residents of North Dakota will consider a measure that reaches far beyond any of that — one that abolishes the property tax entirely.

“I would like to be able to know that my home, no matter what happens to my income or my life, is not going to be taken away from me because I can’t pay a tax,” said Susan Beehler, one in a group of North Dakotans who have pressed for an amendment to the state’s Constitution to end the property tax. They argue that the tax is unpredictable, inconsistent, counter to the concept of property ownership and needless in a state that, thanks in part to wildly successful oil drilling, finds itself in the rare circumstance of carrying budget reserves.

“When,” Ms. Beehler asked, “did we come to believe that government should get rich and we should get poor?”

An unusual coalition of forces, including the North Dakota Chamber of Commerce and the state’s largest public employees’ unions, vehemently oppose the idea, arguing that such a ban would upend this quiet capital. Some big unanswered questions, the opponents say, include precisely how lawmakers would make up some $812 million in annual property tax revenue; what effect the change would have on hundreds of other state laws and regulations that allude to the more than century-old property tax; and what decisions would be left for North Dakota’s cities, counties and other governing boards if, say, they wanted to build a new school, hire more police, open a new park.

“This is a plan without a plan,” said Andy Peterson, president and chairman of the North Dakota Chamber of Commerce, who acknowledged that property taxes have climbed in some parts of the state and that North Dakota’s political leaders need to tackle the issue. “But this solution is a little like giving a barber a razor-sharp butcher knife — and by the way, this barber is blind — and asking him or her to give you a haircut. You’ll get the job done, but you might be missing an ear or an eye.”



The rest is at: http://www.nytimes.com/2012/06/12/us/north-dakota-voters-consider-ending-property-tax.html?_r=1&hp

The idea is interesting.  I can see that there will be a bunch of problems with it, though. 

[Eupher]

I find it interesting that in some states, it's perfectly acceptable to take lottery or other forms of legalized gambling money and allocate it to schools, parks, other warm 'n fuzzy stuff.

But it's not acceptable to take oil revenues and apply it toward the same?

Furthermore, the argument that opponents to the measure have amounts to "well, the system's been in place for 100+ years. We'd be changing everything" is weak on its face. What can be created by man can be dissolved by man. Get crackin', governor.

I absolutely hate property taxes, mostly since lawmakers never found a tax they didn't like and I see shit in my tax bill I never signed on to.

At the very least, the property tax should be lowered to a rate that makes it almost inconsequential.

[NHSparky]

I'm a little torn on this one.

While we have no income or broad-based sales tax, our personal property (vehicles, home) taxes are quite high, comparatively speaking.  Still, according to the 2009 listing provided by the Tax Foundation, we're 44th.  Compare that to the other New England states--MA (11th), Maine (9th), Vermont (8th), RI (5th), and CT (3rd).

North Dakota comes in at 26th.  Now while it might be tempting to say, "Hey, we've got all this oil money coming in, let's cut taxes on our stuff to the bone and just rely on the oil taxes/revenues!"  While that might be nice TODAY, there's no guarantee how long that revenue stream would last.  This story also doesn't discuss any possibility of a "rainy day" fund when the oil market declines, as all markets cycle periodically, and having been raised in a coal and oil-producing region (WY, NM, UT) I see how a single-industry economy can be hit particularly hard in down cycles.

I would say if they think they can lower the OVERALL burden, that would be an excellent thing, but they've got to 1--curtail or limit spending increases and not blow wads of cash on pet projects, etc., and have a cushion set aside for when the oil runs out or cost or availability declines to make extraction economically unfeasible.

[Wineslob]

I wish they would do that here. At one time, because I did a remodel, Butte County re assessed our home. I ended up having to pay 4 installments to "make up" for the added tax, 2 years in a row.   

[Eupher]

Good observations, Sparky, and you're correct in that the ND oil reserve quantity wasn't reported in the article. This may shed some light on that question.

The Bakken formation (from which most of the ND oil would originate) has, per the latest USGS survey, a mean of 3.65 billion barrels of oil. At the rate of 10 million barrels of oil that the US imports every day, that's enough to wean us off imported oil for only one year.

So, on second glance, being very prudent about the oil under the North Dakotans feet is the wise thing to do. Unless another source of revenue were determined and if the North Dakotans have to have their stuff the way they have it, eliminating the property tax entirely just might be overkill.

(Long snopes article at the link):

http://www.snopes.com/politics/gasoline/bakken.asp

[Karin]

I agree with all your reservations about eliminating it entirely.  But I do think high property taxes in general is extortionate.  I especially feel for retired people, who, faced with something like a $5,000 tax bill have to start thinking about selling a home they've been in for so many years.  You start feeling like Scarlett, scheming to get a husband to pay the taxes on Tara.  We shouldn't have to live this way. 

[Ballygrl]

I'm from the State that consistently ranks #1 or #2 as far as property taxes go, and it's terrifying, I totally get the way people in North Dakota feel. My MIL lives in a condo, she pays a monthly maintenance fee and property taxes, her property taxes for a condo, where she has no front or backyard, she pays over $1,200 a quarter, you have seniors around here who can barely get by because it takes such a large chunk of their SS and pension.

Eupher mentioned the Lottery, in NJ what the Lottery takes in is supposed to go towards education, when they talked about expanding the Lottery they said it would be used to keep property taxes down, well it hasn't, my property taxes have increased over 300% since we bought the house.

[Eupher]

I'm from the State that consistently ranks #1 or #2 as far as property taxes go, and it's terrifying, I totally get the way people in North Dakota feel. My MIL lives in a condo, she pays a monthly maintenance fee and property taxes, her property taxes for a condo, where she has no front or backyard, she pays over $1,200 a quarter, you have seniors around here who can barely get by because it takes such a large chunk of their SS and pension.

Eupher mentioned the Lottery, in NJ what the Lottery takes in is supposed to go towards education, when they talked about expanding the Lottery they said it would be used to keep property taxes down, well it hasn't, my property taxes have increased over 300% since we bought the house.

Which is why in no way, shape or form would I even THINK of living on or near the Least Coast or the Left Coast. Sorry, but you guys continually elect politicians that cater to the liberal mindset and have created the kind of tax load that you're having to pay.

I hear there's a lotta land in North Dakota for sale.

Cheap. 

[obumazombie]

There should be a homestead principle that a residence cannot be confiscated, through manipulation of tax penalties, leaving the property owner homeless.

edit for context

[Zeus]

If they eliminated all property taxes that would save my family back home about $30,000/yr. Might cover their fuel bill for a season.

North Dakota's State budget was operating in the black even before the oil boom so if they did a little planning they very well may be able to eliminate property taxes.

[Bad Dog]

There should be a homestead principle that a residence cannot be confiscated, through manipulation of tax penalties, leaving the property owner homeless.

edit for context

Good luck with that.  Good news - Drudge says the vote to eliminate the tax passed.

[Eupher]

Good luck with that.  Good news - Drudge says the vote to eliminate the tax passed.

Wow, that runs contrary to the OP's article that states that most people polled were AGAINST eliminating the property tax. WTF 

[Bad Dog]

Wow, that runs contrary to the OP's article that states that most people polled were AGAINST eliminating the property tax. WTF 

Didja ever notice (Andy Rooney voice) how polls always seem to reflect what liberals want to happen? Case in point Walker & whatshisname in a dead heat going up to the recall vote.

[NHSparky]

I agree with all your reservations about eliminating it entirely.  But I do think high property taxes in general is extortionate.  I especially feel for retired people, who, faced with something like a $5,000 tax bill have to start thinking about selling a home they've been in for so many years.  You start feeling like Scarlett, scheming to get a husband to pay the taxes on Tara.  We shouldn't have to live this way.  

But what is easier to deduct from one's taxes?  A $5000 property tax bill or $5000 worth of sales taxes?

And many states (GA for one, I think) cap property tax rates for retirees, and it's something that more states should look at.

[docstew]

My lovely wife and I just paid the first installment of property taxes on the condo we own in IL.

Jess and Deb, you'll get a kick out of this...

In Rockford, IL, property tax rates are

12%

Every 8 years, we're buying that condo again. Tell me that's right.

[Karin]

12% of the value?  So for a $150,000 home (which is very modest), P-taxes are $18K per year??!!   

Who has that kind of money?  Talk about a war on the middle class! 
This is too depressing, and I want OUT OF NEW YORK.  However, it's always a knock down, drag out fight when the subject is broached.  All because family is here.  (His, not mine).  Big deal, it's called travel to visit.  You can't save for retirement like a responsible person when the state is taking every dime! 

[obumazombie]

My lovely wife and I just paid the first installment of property taxes on the condo we own in IL.

Jess and Deb, you'll get a kick out of this...

In Rockford, IL, property tax rates are

12%

Every 8 years, we're buying that condo again. Tell me that's right.

I'm not gonna tell you that's right, I will tell you the math seems off. The property tax is based on the assessed value of your property. It can go up, I've never seen it go down. So you would be buying a new one in less than 8 years.

[Ballygrl]

Which is why in no way, shape or form would I even THINK of living on or near the Least Coast or the Left Coast. Sorry, but you guys continually elect politicians that cater to the liberal mindset and have created the kind of tax load that you're having to pay.

I hear there's a lotta land in North Dakota for sale.

Cheap. 

It's something we've struggled with for a long time, my Husband would love to move out of the State, it's not easy though, we have all of our friends here, the majority of our family is still in the Tri-State area, and we can't just leave our Parents here or take them out of their environment either, so we're stuck.

[Ballygrl]

12% of the value?  So for a $150,000 home (which is very modest), P-taxes are $18K per year??!!   

Who has that kind of money?  Talk about a war on the middle class! 
This is too depressing, and I want OUT OF NEW YORK.  However, it's always a knock down, drag out fight when the subject is broached.  All because family is here.  (His, not mine).  Big deal, it's called travel to visit.  You can't save for retirement like a responsible person when the state is taking every dime!

Aren't property taxes in NY State much better then it is in NYC and the Boroughs?

[NHSparky]

I'm not gonna tell you that's right, I will tell you the math seems off. The property tax is based on the assessed value of your property. It can go up, I've never seen it go down. So you would be buying a new one in less than 8 years.

My assessed value has dropped twice since I bought my house.

However, the tax rate used to be about $17 per $1000 assessed value.  It's just under $24 per $1000 now.  Either way, the amount of taxes I've paid has gone up, but not as badly as it could have.

[docstew]

I'm not gonna tell you that's right, I will tell you the math seems off. The property tax is based on the assessed value of your property. It can go up, I've never seen it go down. So you would be buying a new one in less than 8 years.

What I meant is that we will pay the total assessed value of that condo every 8 years, just for the privelege of owning it.

[rich_t]

ND has a 1 billion dollar budget surplus.  I'd say they can afford to cut taxes and that they should.

Government at any level shouldn't be making a profit.

[sybilll]

ND has a 1 billion dollar budget surplus.  I'd say they can afford to cut taxes and that they should.

Government at any level shouldn't be making a profit.

^5

[thundley4]

ND has a 1 billion dollar budget surplus.  I'd say they can afford to cut taxes and that they should.

Government at any level shouldn't be making a profit.

That only means that the state government is not spending enough to help the poor and they are not paying public employees what they should be making. /DU mode

[NHSparky]

ND has a 1 billion dollar budget surplus.  I'd say they can afford to cut taxes and that they should.

Government at any level shouldn't be making a profit.

True, but there are functions and infrastructure which need improvement and simply saying cut spending when there is a legitimate need for better roads, more schools, and water/sewer/etc for the families coming in to develop those resources aren't free either.

It's a measure of RESPONSIBLE spending.  You can't go apeshit with the checkbook, but neither can you slam it shut.