ABOLISHING PROPERTY TAXES
IN NORTH DAKOTA
First, I would like to thank Rep. Ruby for sponsoring the amendment to abolish property taxes.
There has been a lot of discussion in the legislature this session about what to do with property taxes.
Legislators have introduced over a dozen different bills to equalize property taxes or grant more exemptions. Meanwhile, many legislators just shrug their shoulders saying this is a local issue and they can do nothing about it.
But Rep. Ruby has seen to the core of the problem: The system is so broken that granting more
exemptions or non-exemptions will only make a bad problem worse. And since our state constitution authorizes
ONLY local governments to assess and levy property taxes, the solution is to amend the Constitution. Property taxes
take $716 million out of our familyl budgets each year. There is no better way to empower the family and put the money where it will do the most good--backk in family budgets and in the hands of those who have earned it.
Property taxes are a disincentive to business and our government leaders know this. That is why they use property tax abatement to attract new businesses into the area, adding to the tax burden of homeowners and established businesses.
The only solution is to abolish property taxes. The question of course is “How do we replace the revenue that property taxes provide?” Two years ago the legislature increased state spending 23.5%--even though our population did not increase. The amount of increased spending was enough to replace property taxes. Over the last two years the state sales and income taxes you paid exceeded state spending by $1.3 billion. Instead of increase state spending yet again, this money could replace the revenue raised through property taxes. However, even if the legislature wastes this excess revenue on additional government growth, our proposal identifies the sources of revenue to replace what is currently generated through taxing your home.
Think of what this will do for our state: As we enter an economic downturn, North Dakota will be the only state in the country that has no property tax. We will be a magnet to every business and industry in the nation and we won’t have to spend a dime for Economic Development to do so.
This will mean our small communities will have the same level playing field as larger cities when trying to attract businesses. Right now a small community can’t afford to offer the economic development incentives that the larger cities can but with no property tax, a city like Wahpeton should be able to easily find a new tenant for the empty Imation factory without stressing their city budget.
Our state will be a magnet to young families who are not able to afford to buy a home in other states. No property taxes will spur the home building industry, adding jobs to the state. It will spark a surge in home-ownership, something I’m sure every realtor will be happy to see. Home ownership means stable neighborhoods and strong schools.
There will be no more need for all the extraterritorial battles we see in our larger cities. Cities like Fargo give so many tax abatements to business that they must expand their boundaries in order generate new property tax revenues. With no need for property taxes, there’s no need for arguing over the ET boundaries.
Abolishing property tax will change the economic landscape of our state and put us light years ahead of the rest of the nation.
Note: We are not requesting the legislature to abolish property taxes. We are only asking them to pass this measure so that over the next 21 months the citizens of this state can debate the pros and cons of this proposal. True and meaningful property tax reform is such an important issue that it deserves a full public debate. Then at the end of the debate the voters can decide if they wish to abolish property taxes or not.
We believe that in a true democracy important issues such as those we are discussing to day require full, fair and meaningful debate and then the voters.
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| Limit spending, abolish property tax in North Dakota |
| Friday, 06 March 2009 |
Letter from Robert L. Hale
Minot, N.D.
Over the last four years, state sales and income taxes have raised almost $4 billion dollars more than needed to fund our state budgets. In short – state taxes are exceptionally high. In fact, state taxes are so much higher than needed we could abolish property taxes without an increase in any taxes.
Unfortunately, this is not what has happened. Instead, special interests – including state agencies and our elected state representatives have chosen to go on a spending spree - unprecedented in state history.
All efforts to reign in this spending orgy have failed. The average state taxpayer/vote is too busy making ends meet to participate during the state budgeting process. However, state agencies, special interest lobbyists and politicians buying voting blocks have had our tax dollars to finance their efforts to pass legislation allowing them to take and spend our money.
What should be done? The right thing to do is to reduce the tax burden on North Dakota families. Every effort to get our state representatives and governor to reduce spending has been met with utter disregard and contempt. Token “tax relief” is offered in the hope citizens will not realize just how excessive state taxes are and how wasteful state spending is.
It is clear that if taxpayers/voters/citizens are to have any control over taxes, spending and the growth of government it will only happen if they take control.
Two resolutions have been introduced that will give taxpayers/voters an opportunity to hear, participate in and debate the pros and cons of:
HCR #3046 – Abolishing Property Taxes in North Dakota,
HCR #3049 – Setting Spending Limits on Government.
These resolutions were heard in the House Constitutional Revisions Committee on Feb. 26. The question is whether or not YOU should have the opportunity over the next 21 months to hear the pros and cons of these measures and then be able to vote whether you wish them to be adopted. If the Legislature passes these measures, you will have, after hearing and participating in the debate, the opportunity to amend our Constitution and implement either or both.
Property taxes prevent any of us from ever owning our home. Even after we have paid off our mortgage we must continue to rent our home from the government or be forced to sell it. If we can’t be secure in our home we can never truly have freedom and security.
Taxes are not our problem – spending is. Right now state tax collections exceed government needs by more than what we pay in property taxes. We can eliminate property taxes. In doing so local jurisdictions will retain complete and total autonomy over how those revenues are spent just as they do now.
HCR #3046 & #3049 are simple, clear and easy to understand. Urge your Representatives to voter to put these two measures on the ballot so in November of 2010 we can decide – after hearing all the pros and cons – whether we want to abolish property taxes. And so we can decide if we want to put reasonable and rational limits on government spending.
We believe we elect our representatives to prioritize how they will spend the precious tax dollars we give them NOT to tell us how much of what we earn we get to keep.
Hale is an attorney, builder and developer/operator of retirement and assisted living facilities.
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Testimony HCR 3046 2-26-09
Chairman Kim Koppleman
Prepared by Keith Colville, Communications Officer
Committee for Community Involvement (CCI)
Valley City, North Dakota
website-www. valleycitycci. com
Mr. Chairman, my name is Keith Colville and I am with the Committee for Community Involvement out of Valley City. I am representing CCI to encourage a DO PASS on House Concurrent Resolution No. 3046
Our group has been studying property taxes for over 4 years. We have come to the conclusion that the property tax system is completely broken and a blatantly unfair. People who keep up their homes and try and improve them are punished with higher taxes. We have talked to many people who let their properties go so they don't get hit with higher taxes. We believe that if property taxes were done away with our North Dakota economy would boom.
People would not get penalized for improving their homes, making them more valuable. That it turn will be a boom for contractors, lumber yards, home appliance stores just to name a few. Revenues from income and sales taxes would increase and North Dakota would become more beautiful.
If property taxes were eliminated, it will keep the government out of our homes. Right now if you refuse entry to the tax assessor the State has ordered them to really stick it to you to "get your attention". This may be normal living under a King in old England but in a free country as ours this is outrageous. Anyone else doing something like this, it's called "coercion" (Intimidating behavior that puts a person in immediate fear of the consequences in order to compel that person to act against his or her will).
Just today we received a letter from a local Barnes County Assessor. He lays out a few additional points to show that the system is broken. Below are excerpts from his letter.
LOCAL ASSESSORS ARE LIMITED.
The Cost Schedule Sheets, (various tables used to determine structure costs) are not kept current in the Assessor Manuals. As a result, local assessors can no longer determine current value of property. Information and data must be taken into the local County Tax Director’s office where it is entered into a computer program that produces the final value. The Tax Director is willing to come out and assist in gathering the information but it still has to go back for entry into the computer.
Removing the assessors from the calculation portion prevents them from being able to explain in detail how some of the final amounts were arrived at. Nor do they have a way of knowing when errors occur which we know does happen.
IRREGULARITIES.
There are examples of appraisals done by the local Tax Director’s Office which are extremely high one year, ($409,000) but then dropped to ($265,000) when a professional appraiser is hired to value the property. Their results were $290,000. Guess which amount they went with – Yes, the $290,000. Just seems a little fishy.
LAND PRICES.
There is considerable variation in land prices within townships and communities. This is to be based on actual sales but in researching recent sales the prices are not justified. Just in one subdivision the lots vary from $51 to $71 per frontal foot. Others at the same location are based on acreage. One lot has a front and back to the road and therefore has 504 ft of frontage at $71 per ft comes out to $35,784. They only paid $9000 for it 2 years ago. A lot across the road which is more desirable sold for approximately $16,000 around the same time is only appraised at $24,200.
Land that is hayed is being taxed as residential development lots because the possibility is there that someone someday could build on it. This won’t happen unless they survey and subdivide the land. Land is to be taxed as it is used not zoned.
We encourage a DO PASS on HCR 3046 and let the people of North Dakota decide if this is what they want.
Sincerely,
Keith Colville
Committee for Community Involvement
Abolishing Property Taxes in North Dakota
by Dennis Stillings
It’s an honor to be here, and I wish to thank Representative Ruby for sponsoring the amendment to abolish property taxes.
I was born and raised in North Dakota and—after detours to Minnesota (Minneapolis), South Dakota, Montana, and Hawaii (the last 15 years)—I have returned here to spend my retirement years. My friends in Hawaii questioned my decision, but North Dakotans thought me to be quite mad.
I love this state. It’s a great place to live. And I believe that the time has come for North Dakota to showcase its assets, both material and non-material. In addition to our well-known natural resources, we have a sense of personal responsibility that is rare these days. We believe in traditional values, we possess a real and famous work ethic, and we share a simple and sincere desire to be of service to our communities, our state, and our country.
The abolishing of property taxes would have far-reaching positive consequences, both at the level of the individual and at the level of the state.
At the individual level—and I speak as a older representative of that level—those who are about to retire, or have already retired, now find that, due to the current financial crisis, their assets have been drastically reduced. Many elderly have been forced to cut back on their retirement plans, perhaps even to sell their homes. The never-ending payment of property taxes does not add to their quality of life. In today’s housing market, where the value and sales of existing houses continue to drop relentlessly, and where potential buyers find credit difficult to obtain, the situation for retirement-age people may become even worse.
At the state level, abolishing the property tax will send shock waves of excitement through the country. We will be the only state without a property tax. Property tax is a very sore point in many parts of the United States. For years, property taxes rose as the housing bubble expanded, and local governments saw the opportunities for large additional revenues, but assessed values failed to contract as housing prices plummeted, houses could not be sold, and heavy losses were suffered.
It will not be lost on people across the country that—in a state without property tax—they can actually pay off their homes and still own them free and
clear, without having to pay annual fees to maintain an illusion of ownership. Business and industry will respond accordingly.
As someone high in the Obama administration recently said, "You never want a serious crisis to go to waste."
Now, a serious crisis can certainly be exploited by power-hungry social engineers, but where there is danger, there is also opportunity for good people to do good. We have been given an opportunity to propose real changes with real content.
Thank you.
(Below is for budget caps)
Testimony HCR 3049 2-26-09
Chairman Kim Koppleman
Prepared by Keith Colville, Communications Officer
Committee for Community Involvement (CCI)
Valley City, North Dakota
website-www. valleycitycci. com e-mail-valleycitycc i@yahoo.com
Mr. Chairman, my name is Keith Colville and I am with the Committee for Community Involvement out of Valley City. I am representing CCI to encourage a DO PASS on House Concurrent Resolution No. 3049
After reading a letter from a city auditor from a city in North Dakota to your commitee explaining the cost increases that her city is experiencing and how it would be unfair to cap their budget with increases linked to the Consumer Price Index (CPI). We immediately thought of two things. First, this auditor did not put into the equation that the people who pay the bill for her and her city are also experiencing cost increases and unexpected costs. For instance, a friend of mine lives on a fixed income, when he gets hit with unexpected expenses he has to adjust his budget to make up for them. His snow removal costs have increased this year too. Additionally, just yesterday he had to spend over 500.00 to fix his water conditioner, a expense he wasn't expecting. Last summer he had to replace his 10 year old lawnmower, the year before he had to replace his furnace. Of course there are many more examples that we could list but we think the point is made that the people are hurting too.
Secondly we thought of statements made by former Governor Ed Shaffer. He was asked on a talk show a while back about the 95% budgets that he proposed back when he was governor and he was asked, looking back how that all turned out. He said that when he left office we had a lower cost of Government, we had fewer state employees and people had more money in their pockets and better jobs and a better economy in the State of North Dakota.
Governor Shaffer went on to say that the people that look at this and said, you know what we have a limited amount of resources, we are going to create the best university, the best city or what ever the case is, they do well. The people who say it's never enough money we need more. Those people never focus on creating an excellent university or city within the revenue that they have and Governor Shaffer said that's a problem and that's why we're seeing costs spiral out of control today.
We would like to see 95% budgets mandated not just capping them with CPI adjustments. We looked back and read the minutes from some of the higher education meetings when the 95% budgets were proposed and while some thought is was the end of the world others looked at it as an opportunity to prioritize and cut waste.
Although we don't think this legislation goes far enough we do encourage a DO PASS on HCR 3049 and let the people of North Dakota decide if this is what they want.
Sincerely,
Keith Colville
Committee for Community Involvement
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