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Mike Nowatzki, Forum News Service, Published January 16 2014

ND Farm Bureau finalizes language for property tax reform measure

BISMARCK – North Dakota Farm Bureau officials hope to finalize draft language by the end of next week for an initiated measure to reform property taxes, a lobbyist for the group said Thursday.

Eric Aasmundstad said the measure aims to restrict local governments from automatically raising property taxes as property valuations rise and to give residents a vote in budget increases.

“Our local spending habits have gone out of control,” he told Republicans gathered for a North Dakota GOP luncheon in Bismarck.

Farm Bureau members voted at their November convention to develop the initiated measure, which will need 13,452 petition signatures to get on the November ballot.

The group seeks to clarify the property tax process by changing all references of “mills” in state law to “dollars per thousand dollars of taxable valuation.”

Cities, counties and other local political subdivisions would have to use baseline budgeting and develop their budgets on a biennial basis as the state Legislature does.

Proposed budget increases would require voter approval during primary elections.

“All we’re saying is you can’t automatically take it. You have to ask for it. You have to justify it,” said Aasmundstad, a former Farm Bureau president from Devils Lake.

The measure would allow local governments to increase their budgets based on new property added to the tax rolls. And it would establish a fund for distributing state property tax relief dollars to political subdivisions – but only if they provide a dollar-for-dollar reduction in property taxes.

“We think it’s a very good start to reforming the system,” Aasmundstad said.

The language should be finalized by the end of the month, and “we’re hoping by the end of next week” so it can be submitted to the secretary of state’s office for approval, he said.

The North Dakota Association of Counties hasn’t taken an official position on the Farm Bureau’s proposal, but communications manager Jeff Eslinger said it would be “unworkable” because of the different budgeting schedules among counties, cities, school districts and townships.

Taxes can’t remain flat if the cost of providing services such as road maintenance rises, he said, citing a Michigan study that found asphalt prices increased nearly 47 percent from 2005 to 2011.

Eslinger also noted that local budget hearings are often poorly attended, despite changes in recent years designed to provide better public notice.

“People would be voting on every single budget, and I don’t think the people want to do that,” he said.

The nonprofit coalition Empower the Taxpayer also is planning an initiated measure to abolish property taxes after voters rejected the group’s first attempt, Measure 2, by a margin of 77 percent to 23 percent in June 2012.

Coalition Chairwoman Charlene Nelson of Casselton said it will be “a few months” before the group submits its draft language. She said she’s concerned that the number of initiated petitions being circulated – the Farm Bureau’s would make it four – is “starting to muddy the waters” for voters.

Nelson said the Farm Bureau’s proposed list of reforms doesn’t address the core problem of property tax.

“No one wants to address the real problem, which is people are losing their homes,” she said. “They want to use a Band-Aid, when what we need is something far more than a Band-Aid.”