4 hours Ago By Rob Port
MINOT — Measure 4 was a bad idea, and it was soundly defeated by voters who, wisely, were not keen on eliminating an existing, admittedly flawed tax regime without assurances that it wouldn't be replaced by something worse. But, coming out of the election, it seems that most political leaders in our state understand that the status quo with property taxes cannot stand. You'll hear a few lawmakers griping about how they haven't gotten enough credit for the property tax relief they have implemented, as ineffectual as it's been, and some local government leaders who think Measure 4's defeat is a mandate to continue as things are, but they are the minority.
As the next regular legislative session looms, the majority position among lawmakers (as well as Gov.-elect Kelly Armstrong) is that something must be done. Unfortunately, that majority is fractured around dozens of proposals that have already been drafted ahead of the January commencement of the session.
Everybody and their uncle has an idea for fixing property taxes. What we need is a winnowing. Two approaches are emerging that have caught my eye.
The first is proposed by Rep. Ben Koppelman, of West Fargo. He wants to target valuations, and rightfully so.
The steady rise in property values in most parts of the state has allowed local governments to get away with murder, reaping revenue gains that aren't tied to actual needs. What's worse is that, for property owners, this is a tax on unrealized gains. Just because the state's assessors say your property is worth, say, $50,000 more does not mean you have $50,000 sitting in your bank account to pay the resulting tax bill.
Koppelman wants to shift to a tax on property square footage. He also proposes some tweaks and exemptions to how the ultimate bill is calculated, but that's the thrust of his idea, and it's intriguing. Unfortunately, Koppelman is not popular among his fellow lawmakers.
He's a member of the far-right faction of the NDGOP that got steamrolled in the June primaries. Koppelman challenged Rep. Mike Lefor for majority leader last week and was soundly defeated in a 53-29 vote among the Republican caucus.
Even so, Koppelman's idea has merit and should get some attention. Another meritorious idea comes from Rep. Scott Louser, of Minot.
Louser discussed his idea on a recent episode of the Plain Talk podcast. He proposes a complete state takeover of K-12 funding, which he estimates would result in an immediate reduction in property tax bills of 25-50%, depending on where you live. He would couple that with a 3% cap on property tax increases, though he'd include a wrinkle.
Local governments would be able to bank unused increases for future revenue cycles, giving them some flexibility to deal with rapid growth or emergent situations. The drawback of this plan is cost — Louser thinks the K-12 takeover would cost over $700 million per biennia — and the potential incentive local governments would have to max out property tax increases at the 3% cap every year. Still, like Koppelman's plan, it's a serious proposal worthy of scrutiny.
.
