Study of property tax elimination; NDAREC opposes measure
Also recently, an interim legislative committee has been reviewing an upcoming ballot measure to prohibit political subdivisions from levying taxes on the assessed value of property. This is Measure 2 for the June 12, 2012, primary election ballot. Last June, the Legislature’s Property Tax Measure Review Committee, chaired by Rep. David Drovdal (R-Arnegard) began meeting to analyze the financial consequences for the state should voters approve the measure.

The measure begins with this title language: “The initiated measure would amend sections 1, 4, 14, 15 and 16 of article X of the North Dakota Constitution and repeal sections 5, 6, 7, 9 and 10 of that same article, eliminating property taxes, poll taxes and acreage taxes, effective January 1, 2012. The measure would replace the lost revenues with allocations of various state-level taxes and other revenues, without restrictions on how these revenues may be spent.”

Also at the beginning of measure is this language amending section 1, Article X to read: “The legislative assembly shall be and all political subdivisions are prohibited from raising revenue to defray the expenses of the state or political subdivisions through the levying of a tax on the assessed value of real or personal property.”

At its summer meeting, the board of directors of the North Dakota Association of Rural Electric Cooperatives (NDAREC) passed a motion to oppose Measure 2. Some of the concerns that prompted this action include:
• While the vote on the measure will take place in June 2012, the measure states that it would take effect six months earlier, on Jan. 1, 2012. With the Legislature not scheduled to meet again until January 2013, there are many questions as to where the revenue will come from to continue providing local government services.
• Initial estimates indicate that to replace lost revenue by eliminating assessed property taxes would require doubling the 5 percent state sales tax or tripling the current individual and corporate income tax rates in the state, or some combination of both.

Legislature completes session, continues tax repeal study

The special session of the 2012 North Dakota Legislature spanned just five days, but it produced significant results in a number of key areas.

“This special session of the Legislative Assembly has given us an opportunity to address several pressing needs that could not be postponed,” said Gov. Jack Dalrymple.

Among the accomplishments of the Legislature during the special session are:

• Adoption of legislative redistricting, leaving at 47 the number of legislative districts in the state.
• Establishing a $50 million Rebuilders Loan Program fund, directing the Bank of North Dakota to offer fixed, 1 percent disaster assistance loans of up to $30,000. The loan program will be available to residents in counties that are included in the state’s presidential disaster declaration, including Barnes, Benson, Burleigh, McHenry, Morton, Ramsey, Renville, Richland and Ward.
• Appropriation of $30 million in additional impact grant funds for cities, counties and other political subdivisions, tacked onto the $100 million in impact grant funds the Legislature approved previously to address impacts from oil and gas industry growth.