BISMARCK — A proposal backed by North Dakota Gov. Doug Burgum to put a few hundred more dollars into the pockets of state taxpayers breezed through the House chamber on Thursday, Nov. 11, in spite of earlier opposition from the Legislature’s Republican leadership.
House Bill 1515, which was introduced by Rep. Pat Heinert, R-Bismarck, and mirrors a proposal plugged by Burgum in recent months, cleared the lower chamber in a unanimous 92-0 vote on Thursday. If passed into law, the plan would draw on the state’s currently flush coffers to provide up to $350 in credit to every North Dakota resident who files income taxes both for 2021 and 2022.
The overwhelming show of support for the bill in the House comes after the Legislature’s GOP leadership repeatedly dismissed the proposal while it was touted by Burgum over the last few months. The Republican governor again pushed for lawmakers to pass tax relief in a state of the state address kicking off the special session on Monday, but the idea conflicted with a preference laid out by the House and Senate majority leaders to hold off for more permanent tax reforms during a full legislative session.
The tax relief proposal has also gained steam as the Legislature is preparing to dole out $1.1 billion in federal coronavirus aid, funding that would go into an array of energy, infrastructure, health care and specialty projects, but which includes no offerings that would put money directly into the wallets of North Dakotans.
Montpelier Republican Rep. Craig Headland, who chairs the House Finance and Taxation committee, said he thinks the tax relief plan had broad support in the House from the start and added that he believes Burgum’s vocal advocacy for the plan has ramped up pressure on lawmakers to use their special session to pass tax relief.
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“I don’t think we needed it over here, but the Senate probably did," Headland said. "They're going to hear about it form their constituents. There's no question."
Burgum spokesman Mike Nowatzki told The Forum that Burgum is "very much" in support of Heinert's proposal. While there was no bill matching Burgum’s plan when the special session kicked off at the beginning of this week, Heinert introduced his legislation late using a two-thirds majority vote on the House floor on Tuesday.
House Majority Leader Chet Pollert, R-Carrington, who previously voiced opposition to Burgum’s idea, said after the bill’s late entry earlier this week that momentum seemed to be building for tax relief in the House, and "sometimes you don’t get in front of a locomotive.”
Pollert reversed his position and voted for the bill on Thursday.
Senate Majority Leader Rich Wardner, R-Dickinson, maintained his preference for lowering taxes through permanent reform, focused on property taxes rather than income taxes. He also said that if the $350 credit gets approval it will reduce the capacity for the Legislature to make broader tax code changes when lawmakers return to Bismarck in 2023, perhaps kicking that plan down the road by one or two sessions.
Still, Wardner said he doesn’t know yet how he will cast his vote when the bill arrives on the Senate floor and added that he expects the proposal will pass the chamber.
"Minds have been changed," he said.
Unlike Wardner, Headland said he thinks the temporary relief puts more pressure on the Legislature to make long-term tax changes in 2023. House members have long wanted to find a way to cut taxes, Headland noted, adding that he and other lawmakers have been meeting with the governor about lowering both individual and corporate tax rates.
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If the tax relief proposal passes into law in its current form, the rebates will erase the state income tax liabilities of around 300,000 North Dakotans, State Tax Commissioner Ryan Rauschenberger said.
The total cost of the proposal comes out to $211 million over two years, a little over half of the state’s surplus from the last budget cycle. That’s a few million more than in Burgum’s original suggestion, which would have paid out up to $500 per tax return but capped married couples at one rebate per year. The version approved in the House would allow married couples to claim a combined credit of up to $700 dollars.
Readers can reach Forum reporter Adam Willis, a Report for America corps member, at awillis@forumcomm.com .
