BISMARCK – Gov. Jack Dalrymple said Tuesday that his new Task Force on Property Tax Reform will identify “meaningful, long-term savings” for taxpayers, while a top Democratic lawmaker said the problem hasn’t been a lack of good ideas but rather the Republican-controlled Legislature’s lack of openness to them.
With several of the task force’s 14 members standing behind him at the Capitol, Dalrymple said the state has made “great progress” in reducing the tax burden on North Dakotans. Lawmakers have provided about $2.4 billion in tax relief since 2009, with roughly $1.5 billion of that coming through reductions in local property taxes, including $856 million for the current biennium.
But property tax collections continue to swell for some cities, counties and other local taxing authorities because of rising property valuations. That’s led to a lot of questions from taxpayers about how the property tax system works and whether relief “is really being delivered,” Dalrymple said.
“There’s no question: They’re not seeing the improvements and changes they think are appropriate,” he said. “They are asking us to tackle it and dig into it.”
Dalrymple created the task force by executive order, directing its members to research and analyze all mill levies authorized for political subdivisions other than school districts.
He said school district levies won’t be part of the study because they’ve been addressed over the past three legislative sessions.
Dalrymple said he wants to apply to the task force the same type of expertise that helped the state’s Commission on Education Improvement reduce the average general fund mill levy for school districts from 190.55 mills in 2007-08 to a projected 67.2 mills in 2012-13.
“We’re hopeful that we can achieve some very meaningful results,” he said.
The task force will hold its first meeting at 10 a.m. Friday at the Capitol.
Dalrymple said he wants the panel to forward recommendations to the Legislature when it convenes in January 2015.
Among the task force members is Sen. Dwight Cook, R-Mandan, chairman of the Legislature’s Taxation Committee that’s conducting an interim study on property taxes.
House Majority Leader Al Carlson, R-Fargo, said Monday that the governor’s task force duplicates that committee’s efforts.
But Cook disagreed, citing the value of experts appointed to the task force.
“We’re part-time legislators. We need their knowledge on some of the issues we’ve got to deal with.”
Dalrymple said the task force will regularly report to the committee and sees “no conflict at all” with what the committee is doing.
‘Lack of openness’
Senate Minority Leader Mac Schneider, D-Grand Forks, was quick to point out that several bills designed to ease the property tax burden on homeowners and renters died at the hands of the governor’s own party last session.
One bill, introduced by Legislative Management as a result of an interim study, would have provided a residential property tax credit. A Senate bill sponsored by Democrats that would have reduced the taxable valuation of a home and a bipartisan House bill that would have provided a tax credit to renters also were defeated largely along party lines.
“I’m certainly not against looking at new ideas, but I think there has to be an openness to new ideas that we haven’t seen from the supermajority in the past,” Schneider said.
Dustin Gawrylow of the North Dakota Watchdog Network, a nonprofit taxpayer advocacy group, also urged another look at past ideas, including a flat exemption on a certain percentage of a property’s valuation. He also supports standardizing the assessment process under the state Tax Department and eliminating automatic tax increases when property values rise.
“I think that if they look at actual solutions and actual public policy, things that can be done to improve the situation, it can be valuable,” Gawrylow said of the task force. “If it’s just a vanity project, it’s not going to do anyone any good.”
One idea Dalrymple floated is that the state could foot more of the bill for social services typically covered by county taxes, such as health care delivery and services for poor North Dakotans.
Schneider also said additional bipartisanship would benefit the task force, which now has two Republican legislators as members: Cook and Rep. Wes Belter of Fargo, chairman of the House Committee on Finance and Taxation.
The task force doesn’t include any members of Empower the Taxpayer, a nonprofit coalition behind the movement to abolish property taxes to state voters in 2012. Measure 2 was soundly rejected by a vote of 23 percent to 77 percent.
Dalrymple called the task force’s 10 voting members “very well-balanced,” with property taxpayers from the residential, commercial and agricultural sectors, as well as city and county officials.
Charles Tuttle, a Minot resident who gathered petition signatures for Measure 2, noted that the task force’s membership is heavy with groups that campaigned against the measure, including the Greater North Dakota Chamber, North Dakota League of Cities and North Dakota Association of Counties.
“How can you say you’re going to have a diverse thought process on a panel, an objective panel, when this panel is obviously not objective?” he asked.
Dalrymple stressed to the editorial board of The Forum on Tuesday that he doesn’t see wiping out property taxes altogether as an option – “I think it’s too valuable,” he said. At least for now.
But if North Dakota’s economy keeps roaring for the next two decades, he said he could picture gradual decreases in property taxes until they’re erased completely. Unlike previous oil booms in North Dakota that quickly went bust, Dalrymple said he thinks the current resurgence will be long-lasting and resilient.
“If things were to keep going the way they are today … I think you could show on paper where probably anything is possible,” he said.
Concerned about local control
Blake Crosby, the incoming executive director of the League of Cities and a nonvoting member of the task force, said he’s “very concerned” about maintaining local control through the ability to levy property taxes.
“I do not want to see that impinged upon in any way, shape or form,” he said.
The scope of the task force’s work will not include looking at the individual income tax, which has been eliminated in some oil-producing states. Dalrymple said he believes it’s more important to keep the income tax low than to abolish it.
Forum reporter Kyle Potter
contributed to this article.
Dalrymple will serve as chairman of the task force. Its other members are:
- Blaine DesLauriers, a Minot homeowner
- Hal Gershman, a Grand Forks commercial property owner and City Council member
- Michael Montplaisir, Cass County auditor
- Loren DeWitz of Bismarck, a property tax payer representing agricultural producers
- Bill Wocken, Bismarck city manager
- Ryan Rauschenberger, North Dakota’s deputy tax commissioner. Rauschenberger has been appointed to serve the remaining one year of Commissioner Cory Fong’s term when Fong leaves for the private sector at the end of this year.
- Linda Svihovec, McKenzie County auditor
- Sen. Dwight Cook, R-Mandan, chairman of the Senate Finance and Taxation Committee
- Rep. Wes Belter, R-Fargo, chairman of the House Finance and Taxation Committee
Non-voting members of the task force are:
- James Kramer, director of Dickinson Parks and Recreation and representative for the North Dakota Recreation and Parks Association
- Mark Johnson, executive director of the North Dakota Association of Counties
- Jon Godfread, vice president of government affairs for the Greater North Dakota Chamber
- Blake Crosby, representing the North Dakota League of CitiesDalrymple said the task force will identify opportunities to simplify, consolidate or eliminate unnecessary and duplicative taxes; replace taxing authorities with user-based fee authorities; replace tax levies with other possible revenue sources, such as state funding; and improve the timelines and processes used by local political subdivisions to assess and finalize property valuations and develop operating budgets.