Committee For Community Involvement

Lloyd Omdahl
Columnist

A group of angry citizens, “Empower the Taxpayer,” has embarked on a crusade to initiate a measure for a vote of the people on the question of repealing all property taxes in North Dakota. They claim that the property tax is unfair. They are absolutely right.
The property tax is supposed to be levied according to value, but defining and establishing value in many parts of North Dakota is not easy. Sometimes it is impossible.
Let’s start with farm property. As our contribution to saving rural America, North Dakota does not tax buildings and homes on farms owned by real farmers. Some city folks think that is unfair. Then in order to reduce taxes on the rest of the farm property, the Legislature cooked up an assessment system based on productivity.
This system results in significant differences from one township to the next, a frequent irritant to the farmers on the high side of the township line. They think it is unfair. However, it accomplished what its sponsors intended. Farmland is taxed at half the value of property in urban areas. Some nonfarmers think that is unfair.
Then there are the small towns where homes have no market value. Take my hometown of Conway, population 19 and declining. An assessor can go into Conway with the three basic methods for determining value – income, cost and market – and none of them will work.
Nobody is buying and selling homes in small towns. Consequently, homes have no value in Conway. The assessment gets to be “by gosh, by golly.”
Build a new house in a dying town and the value declines 90 percent before opening the garage door. If any homes in the state are being over-assessed, they are in dying towns. Folks in small towns think that is unfair.
The story is different in major cities, where professional appraisers have honed their assessing skills. According to market studies conducted by the property tax division of the State Tax Department, valuations in major cities are very accurate. Some city folks think that is unfair.
Empower the Taxpayer has been claiming that as much as 40 percent of the taxable businesses and homes are not being taxed in some jurisdictions. That is not true anywhere in the state.
With hungry local governing boards authorized to add missed property after the assessor is done, there is no chance that parcels of property are being missed.
The state government gets nothing from the property tax. Half the tax goes for schools; one-fifth for counties; around one-fourth for cities, and the rest for townships and a variety of special districts. Many of these local governments, especially school districts, would collapse without property tax revenue.
The sponsors of this initiative are pretty cavalier about finding new revenue for local governments. They suggest taking money from other taxes and cutting more budgets to replace the $700 million lost. That’s pie in the sky. There isn’t that kind of loose change in the system.
It would take a book as fat as “War and Peace” to enumerate the many evils of the property tax, but we live with it because we can’t live without it. That’s about the only reason.

By Dennis Stillings
Columnist

“You can have a Lord, you can have a King, but the man to fear is the tax assessor.”
– Anonymous citizen of Lasgash (region of the ancient Middle East)

It isn’t something I have been tracking for very long, but it seems that recently, Lloyd Omdahl, North Dakota’s own resident grey eminence, has had an anti-anger thing going.
Professor Omdahl opened a recent column with a reference to “(a) group of angry citizens” (Empower the Taxpayer) “that has embarked on a crusade” to repeal property taxes in North Dakota. A more recent Omdahl column is titled “Term limit idea riding wave of anger.” Professor Omdahl goes on to refer to those petitioning for term limits as a “group of angry people who are having fun at being angry.” If we are to believe professor Omdahl, our citizenry can be politically classified into two groups: distinguished professors of political science and the pitchfork-and-torches crowd.
Having observed many of the people whom professor Omdahl is referring to, I would say that amused disgust – expressed by a smile and a chuckle and a turning of one’s slightly lowered head from side to side – is the more common sentiment. Real anger seems to be reserved for the abuses of power and flouting of the constitution that, at the level of the federal government, seem to occur on an hourly basis during both day and night.
The sense of all this is that – while His Omdahlness delivers weighty opinions with the calm of absolute certitude, those who have opposing views are clearly in the grip of irrational impulses that are unjustified by the facts as they would be perceived by a genuine grown-up person.
Reading between the lines of an earlier column (March 2 Times-Record) – “It is true: Property taxes are unfair”– we can easily imagine professor Omdahl patting the rest of us on the head and solemnly informing us that – gasp! – “life is unfair.”
Oddly enough, Omdahl’s “defense” of the property tax in the March 2 column amounts to a brief, bright compendium of several of the many reasons why this tax should be abolished.  Unfortunately, darkness then descends over his thoughts, and his assault on the property tax abolishionists ends with the statement that “It would take a book as fat as ‘War and Peace’ to enumerate the many evils of the property tax, but we live with it because we can’t live without it.”  I bet we can.
Professor Omdahl gives the impression that the property tax came into existence as some sort of addendum to the Ten Commandments. In fact, a number of states are moving to greatly modify, or abolish altogether, the property tax – including Texas, Florida and South Carolina. Among foreign countries, England, Italy and Iceland have dumped the property tax.
Other ways can be found to replace the revenue lost by abolishing this tax – and these sources do not amount to “loose change,” as professor Omdahl expresses it; they are tried and true sources already in place.
It must be emphasized that those wishing to eliminate the property tax are not trying to get out of paying taxes, but rather they are trying to find a fairer and more just way of obtaining the necessary revenues. Increasing the sales tax is a frequently suggested alternative to property tax that eliminates not only assessor guesswork and puts the tax under consumer control, but cuts out most of the $50 million to $70 million dollars in costs incurred in administering the property tax.
For those interested in seeing what can be done about eliminating property tax, check out the following Web sites:  www.empowerthetaxpayer.com; www.texaspolicy.com/pdf/2009-04-taxswap-laffer-posting.pdf; www.valleycitycci.com; and look up “Florida House of Representatives Approves Historic Property Tax Relief & Reform.” (The URL is too long and clumsy to print here.)