Residents debate property taxes

Elected officials in Eddy and Foster County weighed in on Measure 4 recently, which will appear on the ballot this November. And now, local residents are doing the same.

If approved, Measure 4 would prohibit all political subdivisions in North Dakota – such as counties, school districts and cities – from collecting tax based on the assessed value of property.

Those taxes are used to fund critical services in communities across the state, including water, sewage treatment, fire departments, law enforcement and road repairs, just to name a few.

Citizens who oppose the measure are concerned that it doesn't include a guaranteed plan for how those funds would be replaced.

Meanwhile, those who support the measure largely argue it would benefit the economy and provide significant tax relief.

Proponents and opponents of Measure 4 have been crisscrossing the state making their respective arguments, and on Tuesday, Sept. 24, the New Rockford Transcript and Foster County Independent released a pair of polls in an effort to discover which argument is prevailing among local residents.

The poll results

One poll was released on each newspaper's respective Facebook page, and the Independent released a third poll in its weekly e-newsletter on Wednesday, Sept. 25. Residents were also given the option of sending an email or reaching out privately if they wished to remain anonymous.

The polls were not scientifically conducted, and do not necessarily depict how the local community nor how the overall state will vote come Election Day on November 5. However, the Transcript ensured that all respondents were North Dakota residents, and residents who voted in multiple polls were only counted once.

Each resident was asked the same question: "How do you intend to vote on Measure 4, the ballot initiative that would eliminate valuation-based property taxes in North Dakota?"

All together, 136 residents responded, and the results were notably one-sided.

Of the 98 residents who responded to the Transcript's poll, 78 said they plan to vote "no," 10 said they're still undecided, and the other 10 said they plan to vote "yes."

Meanwhile, the Independent's poll was even more decisive, although fewer residents responded.

Of the 38 residents who answered the Independent's poll on Facebook or via their e-newsletter, 36 said they plan to vote "no" on Measure 4, while only two said they plan to vote "yes." None said they were undecided.

With all polls combined from both papers, 84% of respondents said they plan to vote "no" on Measure 4, just 9% said they plan to vote "yes," and another 7% said they're undecided.

The overall results are strikingly similar to the results of the Independent's survey of nearly two dozen local elected officials regarding Measure 4. Those results showed that 86% of elected officials plan to vote "no," that just 5% plan to vote "yes," and that 9% were still unsure.

The "vote yes" argument

Just as many elected officials did a few weeks ago, several residents who responded to the question about the measure also provided their reasoning, mostly on the "vote yes" side.

One such resident was Craig Voigt, former publisher of the New Rockford Transcript and a landowner in Eddy County who plans to vote yes.

Voigt said he believes property taxes tend to have no "rhyme or reason" and are often applied unfairly.

"When you got your last property tax statement, you once again saw another increase and if you were among those with some acreage you saw some gut wrenching increases," he said. "This has got to stop.

"People are losing their property because they can no longer pay the property taxes. That is not right!"

The fundamental question of owing taxes on personal property is commonly brought up by those who support eliminating property tax, and one commenter on the Transcript's Facebook poll summed up a position commonly held by those individuals.

"If you can tax my land and take it from me, I do not own it," she wrote. "I am just borrowing it from the government."

As for how the tax revenue should be replaced if Measure 4 gets approved, many suggest taking advantage of the state's Legacy Fund, which currently holds about $10.7 billion in oil tax savings.

"We live in a state with abundant resources and are well positioned to make this change and give back to the citizens what they deserve," said Voigt.

However, eliminating property taxes would remove approximately $1.5 billion in tax revenue received by local governments every year. So a long-term source of funds would likely be needed beyond what's available in the Legacy Fund.

If approved, Measure 4 requires the state to replace any lost tax revenue suffered by local governments, but does not stipulate how they'll acquire the funding to replace those tax dollars. However, Measure 4 does not eliminate all property taxes. Local governments could still levy a tax or fee on property owners based on parcel size, road frontage or the size and type of buildings on the property – just not assessed value.

Former state representative Rick Becker, who's leading the effort to pass the measure, argues their initiative provides much-needed tax relief for property owners without harming essential services.

Voigt, as well as Becker, also contend that North Dakota's economy would soar if Measure 4 is ultimately approved.

"I don't know how many times I've stated the property tax is a regressive tax," said Voigt. "It discourages you from building and making improvements and if you do, you are penalized for it with high taxes.

"If we make the necessary changes, watch the economy here in North Dakota flourish," he added. "Building like we've never seen will be commonplace. Home ownership will benefit and equity values would increase. Mark my word, we will be a model state for other states to follow."

The "vote no" argument

The primary argument used by those who oppose Measure 4 is that there's no plan for how the state replaces lost tax revenue for local governments.

That issue is commonly brought up by local elected officials, but another argument is also beginning to emerge: That the vast majority of property taxes in North Dakota are paid by out-of-state entities.

According to information provided by the North Dakota Association of Counties, of the top three taxpayers in each county, out-of-state companies currently pay approximately 82% of property taxes.

In Foster County, the top property taxpayer is 8th Avenue (Dakota Growers), which was billed over $272,000 for property taxes in 2023. The second highest taxpayer is BNSF Railway, billed for approximately $199,000 in 2023 – both are headquartered out of state.

Foster County's third largest property taxpayer is Fessenden Coop, which has since been acquired by CenDak Cooperative. This in-state entity was billed roughly $189,000 in 2023.

Meanwhile, the top three property taxpayers in Eddy County are all out-of-state entities, accounting for nearly 10% of all the county's property tax revenue.

Eddy County's top taxpayer is BNSF Railway, billed just over $242,000 for property taxes in 2023.

The second highest taxpayer is Columbia Grain and the third highest is Otter Tail Power Company, with each being billed in 2023 for $119,000 and $46,000, respectively.

If Measure 4 passes, the tax burden on these entities would fall dramatically, and the N.D. Association of Counties – which has announced their opposition to the measure – contends that these figures show the "real winners" of eliminating property taxes would be large, out-of-state companies.

For more information

Anyone interested in learning more about Measure 4 can find the complete legislative text on the North Dakota Secretary of State's website at http://www.sos.nd.gov, which also has information about the measure's financial impact, as well as ballot language and analysis.

To hear more from those who oppose Measure 4, visit the website of Keep It Local, a coalition of groups who've come out against the ballot measure. Their website is keepitlocalnd.org.

To hear more from those who support the measure, visit the website of End Unfair Property Tax, the group leading the effort to pass Measure 4. Their website is endpropertytax.com.

The arguments made by local elected officials on both sides of the issue are available on the Transcript's website at http://www.newrockfordtranscript.com