​Keep it local supports local control

By Chad Oban

ali.hoffman@ndunited.org

North Dakotans know that if something sounds too good to be true, it usually is. That is certainly the case with the ill-advised constitutional ballot measure to eliminate the ability of local political subdivisions to levee property taxes.

As the chair of Keep It Local, a coalition of over 70 organizations and member associations dedicated to protecting local control in our state, we are speaking out against this measure because we know it’s a fairy tale. These groups represent emergency services, schools, agriculture, energy, business, realtors, builders and seniors. These groups also represent members and interests across the entire political spectrum. How refreshing in today’s world to see folks from all political stripes come together to stand up for our communities! This is what we want in our politics.

There’s been some coverage in the media about the measure, but the public would be well advised to dive deeper into the consequences should it pass. This measure would put a $1.329 billion hole in our local communities’ annual budgets for essential services, including public schools, police and fire protection, senior programs, snow removal, road and sidewalk repairs, libraries, and more. The scariest part of the measure is there is no plan to replace that revenue, which puts our local communities at risk. No plan is a bad plan.

Rick Becker, fresh off his latest election loss in the race to be the Republican nominee for North Dakota’s sole seat in the U.S. House, is now leading the efforts in support of this disastrous measure. You might have seen a few quotes from Becker about how great it would be to get rid of property taxes, and how our group’s opposition to his measure is a “campaign of fear.” The one thing that you never hear from him, though, is how they plan for the state to compensate local governments. The revenues they will lose under this measure is an amount that was estimated by the Legislative Council to equal 40.4% of the $6.1 billion general fund in the state budget for the 2023-25 biennium.

The proponents will say these are “scare tactics” and that everything will be fine, just trust them. But there is no plan. Saying the Legislature will take care of it is not a plan. Saying the Legislature will magically find the $1.329 billion annually to cover our schools and emergency services is not a plan.

There is no plan, but if this measure passes, it would mean the end of local control within communities across our state. Under the measure, the state legislature and all political subdivisions would be barred from levying property taxes on assessed value. What would the plan be for replacing the estimated $2.66 billion per biennium in revenue this measure would cost our state in total? The legislature would become the school boards, city and county commissions for all our local communities. We would have folks from Fargo going to Bismarck to ask legislators for money for their libraries, schools and police along with every other community in our state. Why should legislators not in our communities determine what is best? We believe in local control and that local officials are best positioned to make these decisions.

Our local government bodies work incredibly hard year-round, crafting budgets and planning for the future with the steady, dependable resources that are provided to them by property tax revenues. How much more difficult will that planning process become when our local communities are losing billions of dollars in revenue and are forced to come begging legislators in Bismarck, who only meet for 80 days every other year, for funds to offset what they’ve lost?

What’s more likely to happen, should it pass, is that other forms of taxes and fees will need to be elevated, both at the state and local levels. Raising either the income or sales tax will potentially hurt those North Dakotans who can least afford the higher rates. As of July 2023, North Dakota ranked at the middle of the pack for combined sales and local sales tax rates, with 7.04%. By blowing a hole of this size in the revenues for both state and local subdivisions, we’ll likely see our rates rapidly shooting to the top of national rankings. Maybe this is part of why no other state has entirely barred property taxes in the U.S.?

Raising both sales and income tax rates would also adversely affect lower-income families in our state, including senior citizens, as they pay a higher percentage of their annual income on the basic goods and services they need to get by.

Renters in our state would be unfairly affected, too. Since they don’t currently pay taxes on real estate, eliminating property taxes saves them nothing. And at the same time, they’ll be paying more in sales tax, income taxes or fees.

At first glance, yes, eliminating property taxes might seem like a plan too good to be true. Dig in a little, as we have, and I think you’ll find this measure puts much of what we value in our communities at risk: public safety, good schools, and beautiful parks and facilities for our kids and families. It is very clear that this is bad for all our communities in which we live, future generations of North Dakotans and the concept of local control in our state.

Editor’s note: Chad Oban is the Keep It Local chair