Letter: It’s time for North Dakota to eliminate property taxes

Roscoe Streyle, working for Home in District 3 in Minot, has a plan to cut back property taxes by 50% for 2 years. Though a really good marketing campaign technique, this similar buy-down plan has already been executed in North Dakota, and it has failed miserably. Even the legislative proponents on the time have now declared it a failure.

Legislators are fast to level out that property taxes are the No. 1 criticism of their constituents. Addressing property tax, subsequently, must be a precedence throughout a marketing campaign, and the guarantees must be adopted by way of with motion throughout the legislative session. The main target have to be on one thing that provides true, long-lasting aid to the individuals of North Dakota.

A state buy-down doesn’t match that invoice. How do we all know the buy-down method is a failure? Think about that the Legislature has already been shopping for down your property taxes. The quantity of property tax the state is paying in your behalf is proudly displayed in your county tax assertion, labeled Legislative Tax Reduction.

Do you suppose your property taxes went down considerably over the previous couple of years? Me neither. A couple of legislators will inform us that though property taxes elevated, they’d be even greater if the buy-downs hadn’t occurred. The numbers inform a distinct story.

Think about the Tax Basis’s annual report exhibiting that the common property tax in North Dakota in 2012 (earlier than buy-downs) was 1.14% of the house’s true worth, rating 18th highest within the nation. The worth of the state buy-down is a bit over 0.6% of the house’s worth, so if the plan labored, our tax would now be about 0.51%, which might put North Dakota within the fantastic place of third lowest property tax within the nation. That’s not what occurred.

The Tax Basis’s most up-to-date report exhibits that North Dakota’s property tax fee was 0.95% in 2021, twenty third highest within the nation. It didn’t work as a result of when the state buys down (subsidizes) property taxes, the cities have extra “elbow room” to lift them. That’s precisely what occurred.

If we mix what you’re paying in property taxes to what the state is paying to purchase down your property taxes, it involves about 2% of the house worth. Which means our de facto property tax fee is now second highest within the nation! Subsidizing (shopping for down) property taxes doesn’t work. It by no means has, and it by no means will.

Additionally, it warrants being reminded; it’s your tax {dollars} going to the state, that are then getting used to purchase down your property taxes. The online impact of buy-downs is that you’re paying extra in total taxes than with out buy-downs.

Some would possibly say that it isn’t your gross sales tax or revenue tax that’s paying for the buy-down, fairly it’s oil tax. That’s dishonest. The Legislature can transfer cash round nevertheless they need. The quantity of oil tax that’s paying for buy-downs may as a substitute be used to fund what your gross sales tax or revenue tax is at the moment funding. In different phrases, the buy-down scheme prevents true tax reforms and reductions from going down.

One other concern with the 50% scheme is that the alleged profit is restricted strictly to owners. Really eliminating the property tax would profit everybody. The No. 1 expense for house owners of flats and business buildings is property tax, which is handed on to the renters. Remove the property tax, and all renters will reap the profit, simply as owners will.

North Dakota is within the enviable place of being the most definitely of all of the states to abolish the property tax. The very best subsequent step is to ask the Legislature to go a invoice within the subsequent session to permit the voters to resolve whether or not they wish to get rid of property tax.

Rep. Rick Becker, R-Bismarck, serves in North Dakota’s Home of Representatives.

This letter doesn’t essentially mirror the opinion of The Discussion board’s editorial board nor Discussion board possession.