BISMARCK - A far-reaching property tax relief bill revealed Tuesday cuts virtually all North Dakota homeowners' property taxes by at least 10 percent and lowers the bill even further for households with incomes below $37,500.
House Bill 1449 "is a dramatic reform to North Dakota property taxes," said prime sponsor Rep. Jim Kasper, R-Fargo.
The plan also puts a brake on local governments' ability to raise more money through higher property valuations.
"You can't have a property tax (relief) bill that doesn't control spending," said Rep. Mark Dosch, R-Bismarck, one of five co-sponsors.
Bill sponsors said the state's surplus - expected to be near $600 million by June 30 - plus residents' continuing complaints about escalating property taxes prompted the bill.
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"People are getting more and more disturbed by how their taxes have been going up," said Rep. Dan Ruby, R-Minot, a co-sponsor.
"This I do believe is the No. 1 issue we're dealing with this session," said co-sponsor Rep. Blair Thoreson, R-Fargo. "When people go back home, they know we have a surplus, they know what they're paying on their property taxes and they think there's a disconnect there."
Primary features of the bill:
E Increases state-funded aid, known as homestead tax credits, used to trim low-income, elderly and disabled homeowners' property taxes.
The aid would rise from a current total of $2 million per year to $15 million per year, with a formula subsidizing those with incomes of up to $37,500. Current law helps only households with incomes $14,500 or below.
E Offers additional state-paid property tax relief by giving homeowners a 10 percent cut on their tax statements. Business and farm property would be cut 5 percent. The plan is almost identical to a bill backed by Gov. John Hoeven and Tax Commissioner Cory Fong.
E Prohibits local governments from increasing the taxable value of property by more than 2 percent per year. Taxable value in North Dakota is the term for a figure derived by cutting the market value of a home by 50 percent and multiplying the result by 9 percent. A house with a market value of $150,000 has a taxable value of $6,750, which is then multiplied by the local mill rate to find taxes owed. A 2 percent increase on that home's taxable value would increase taxes to $6,885.
E Prohibits cities from using home rule charters or other ways to supersede the state limit unless local voters approve an increase by at least 60 percent.
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E Property tax bills would show a five-year history of the property's change in value and taxes paid to each political subdivision, allowing taxpayers to see trends in local levies.
Kasper said he and bill co-sponsors will meet with Gov. John Hoeven later this week.
Fong said he couldn't comment on the Kasper bill without studying it.
Kasper acknowledged that Hoeven and other lawmakers have their own ideas for tax relief, but there can be discussions to reach a compromise combining his and others' bills.
He has a ready reply for anyone saying the state shouldn't interfere with local governments' tax levying practices.
It was the state Legislature that years ago passed laws creating the current formulas local governments use to assess property taxes, Kasper said, so it is the Legislature's responsibility to change those laws if necessary.
"It's our collective opinion that it is the obligation of this Legislature to give some of these dollars back to the people of North Dakota," he said.
Readers can reach Forum Communications reporter Janell Cole at (701) 224-0830 or forumcap@btinet.net
