Measure 4 puts property tax on the chopping block

This November, voters will consider a new ballot initiative targeting the elimination of property taxes in North Dakota.

Supporters of the initiative submitted their proposed measure to the North Dakota Secretary of State’s Office with more than enough signatures (about 36,000) to qualify the initiative for November’s ballot, where it will appear as “Measure 4.”

The initiative, if passed, would prohibit all political subdivisions in North Dakota – such as counties, school districts and cities – from “levying any tax on real or personal property except for bonded indebtedness until paid,” according to language officially approved for the ballot.

Local subdivisions would still be able to levy taxes or fees to property owners based on various criteria, such as parcel square footage, road frontage or building size.

However, the state would still have to replace more than $1.3 billion in lost revenue every year should the ballot initiative pass, according to a preliminary legislative research estimate.

North Dakota’s property taxes currently fund numerous essential services in communities across the state, including water, sewage, fire departments, police and sheriff’s departments, road repairs, jails and teacher salaries, just to name a few.

But supporters of the plan believe funding for local governments can come from somewhere other than property taxes.

Former state representative Rick Becker, who is leading the effort to pass Measure 4, has suggested the creation of new and more “fair” taxes on property owners, in addition to suggesting the state could utilize its revenue from the state’s $10.7 billion oil tax savings.

But the ballot measure itself does not specify how lost revenue would be recuperated, leading to concern from the initiative’s opponents who worry about stripping local governments of their funding without a clear plan once property taxes are eliminated.

If Measure 4 is passed, the recovery of lost revenue would be left to the N.D. Legislature. Then, according to the measure, it would be up to the state to provide annual payments to political subdivisions “in an amount equal to no less than the amount of tax levied on real property by the political subdivisions … during the calendar year in which this amendment was approved by the voters.”

In other words, counties and cities would not receive any decrease in funding moving forward should Measure 4 pass. However, the measure does not account for any increases in funding for political subdivisions should they be necessary.

Meanwhile, Measure 4’s opponents argue that local communities should simply be left to manage funding for their essential services themselves.

Concerns about “local control” led to the defeat of a similar North Dakota ballot initiative to eliminate property taxes back in 2012, and many of the same opponents are already organizing against this new measure.

Keep It Local, a coalition of groups who’ve come out against Measure 4, is hoping the voters of North Dakota will vote against this initiative, arguing it would be harmful to North Dakotans.

“This measure would be detrimental to our economy, our citizens, and our state as a whole,” claims Keep It Local on their website. “There is no well vetted plan to make up the estimated $1.329 billion per year to cover property taxes to fund essential services. … The state legislature has no business deciding what our cities and counties need.”

Meanwhile, End Unfair Property Tax, the group led by Becker working to pass Measure 4, argue this initiative provides much-needed tax relief for property owners without harming essential services.

According to their website, several pieces of legislation will need to be introduced during the next legislative session in Bismarck should voters approve the initiative.

For example, the End Unfair Property Tax website states that legislation will need to be passed that allows townships, as well as rural ambulance and fire departments, to raise revenue.

“They are currently limited to mills of property tax,” the website states. “Without this change, townships would not be allowed to raise any revenue.”

Go to endpropertytax.com and keepitlocalnd.org to learn more about Measure 4 from both sides of the issue.

In a future edition, the New Rockford Transcript/Foster County Independent will ask local officials in Eddy and Foster County – those who are directly tasked with funding essential services – what they think about Measure 4.

Also, watch for our online poll on the Transcript/Independent Facebook Page, which will ask residents how they plan to vote on Measure 4.