I am having a real problem trying to agree with my Republican friends in the legislature and Governor Jack Dalrymple.
I don’t think the governor or the legislature should get much credit for trying to keep property taxes in check. In fact during my legislative leadership I tried to keep the legislature out of property tax controversies. Property tax is actually none of the legislature’s business other than to ensure that it is equitable and collected fairly within a taxing district. How political subdivisions treat their constituents is a matter for their voters to decide. I still believe that government closest to the people is the best.
The state inserting itself into property tax issue is wrong for a number of reasons. Most notably is the state shouldn’t be rewarding real estate holders with general fund revenues. If citizens own real estate they don’t deserve more general fund revenue accruing to them than those who don’t own real estate. This is true no matter how indirect the distribution. The result is the more real estate you own the bigger claim you make on general fund revenues, and that just isn’t right.
Property tax relief as it is now structured also benefits real estate owners who don’t reside in North Dakota. That is also inherently wrong when talking of funds collected for the benefit of the citizens of the state.
I always hated the mill levy deduction in the per-pupil school funding formula. It was another example of rural versus urban. Farmers own land thus want low property taxes. It is that simple. I have always said that school funding should follow the students, not some cooked up formula that tries to make property owners happy. Equity in school funding was the tune legislators heard, but the real effort was to send rural school districts more general fund revenue so they don’t have to raise property taxes.
When certain school districts threatened lawsuits because of the inequality of the formula the answer was always incremental change in the formula with a lot more money added so the rural districts didn’t get a cut. Of course, if they received less general fund revenue they would have had to cut services or raise property taxes. NDEA always got on board for more general fund money because they didn’t want to fight the property tax battle in each rural school district. What are we trying to do, educate children or give money to the owners of real estate?
I found it interesting that Governor Dalrymple, in his State of the State speech, talked about having achieved more equity in school funding. In the same speech he promises that he won’t let there be a cap on mill levy while sending more money as property tax relief. Taking all of it in context, how does anyone think the legislature is going to keep anyone happy? The bottom line is that for 30 years school funding has been a bone of contention. Whether you try to find equity in per pupil payments or you call it property tax relief it all comes down to the same thing.
I believe some of this started with Democrats complaining about property taxes ten years ago. The majority of the property taxes they are complaining about go to fund the schools they claim to be the guardians of. If Democrats are so bent on more education dollars why are they so against local mill levies for education?
Put in context it goes like this: Democrats like to be seen as the saviors of education. Farmers Union, a Democrat leaning organization, hates property taxes. The conundrum is resolved by blaming Republicans for not putting enough general fund money in per pupil payments or doing something about property taxes. The bigger question is how did the Republicans get sucked into this ridiculous argument?
What is the moral thing to do? If the legislature and governor want to give a tax break give it to everyone in the form of abolishing the income tax, reducing the sales tax or both. Every citizen gets their cut of the pie. If a renter gets a tax break they can use it to pay the rent. A home owner anywhere from Minot to Abercrombie could use it to pay their property taxes.
Let the Democrats try and argue against that.