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By TJ Jerke, Forum News Service, Published February 28 2013

Bill would reduce property taxes

BISMARCK – North Dakota property owners are closer to seeing tax relief as the state would take on a greater share of the funding for local schools.

Legislation passed Thursday morning, before House lawmakers headed home for a five-day recess break, will increase school funding while also providing an estimated $595 million in property tax relief.

The new formula comes as a recommendation from Gov. Jack Dalrymple and the bill’s prime sponsor Rep. David Monson, R-Osnabrock.

A large portion of relief coming out House Bill 1319, which passed by an 86-3 vote, will come from the state buying down and removing some of the property taxes that school districts currently can assess their local taxpayers.

“It really cleans up the tax code for school districts,” said the bill carrier, Rep. Mark Sanford, R-Grand Forks, a former school administrator.

Five years ago, the average taxable mill levy for school districts was 195 mills, which has been reduced since, but the proposal would limit the general fund levy for any district to 60 mills.

Each school district would see a property tax reduction of at least 40 mills.

Local taxpayers currently are picking up 35 percent, or $3,047, of an $8,677 bill for the per-student cost of education. Under the new formula, taxpayers would only spend 21 percent, or $1,998, of a $9,322 bill. In other words, the state’s share of education costs would increase significantly under the proposed formula and local school districts’ share would decrease.

The formula is changing to provide more funding for smaller school districts, which generally have higher per-student costs than larger districts.

The bill also mandates a legislative management study to look at education costs, requirements and student outcomes and also sunsets, or ends, in 2015 to incorporate the study results into the formula.

“The formula is going to be based on the cost of education, and the study will be critical going forward,” Sanford said.

Rep. Jerry Kelsh, D-Fullerton, who said the bill is still a work in progress, worried schools on reservations may need more help.

“The baseline funding for some may be off yet,” he said during floor discussion.

“I’m hoping it all gets worked out,” in the Senate, he said.

Public Instruction

The House also passed a $2.1 billion budget for the Department of Public Instruction, the state’s second largest budget, second only to the Department of Human Services.

House Bill 1013 includes funding for the state library, School for the Deaf and School for the Blind.