Another legislative session has come and gone, and once again Governor Jack Dalrymple is touting tax relief which isn’t really tax relief.
Governor Jack Dalrymple “has signed into law an additional $397 million in property tax relief,” his press office sent out last week. But there’s a problem with that number.
The bulk of it isn’t so much tax relief as the transfer of local spending to the state budget. And most of the dollars being counted as tax relief come from local-to-state transfers which already existed.
Most of the $397 million number Dalrymple is touting is “$250 million in property tax reductions to be provided through a state-paid tax credit during the 2015-2017 biennium,” according to his press release. But that’s a continuation and enlargement of a state-paid property tax credit passed in 2013 for the 2013-2015 biennium.
Dalrymple is touting, as new tax relief, $200 million worth of state-paid property tax credit North Dakotans were already receiving. “With the continuation of this program, all North Dakota property owners will again receive a 12 percent reduction in property taxes,” Dalrymple’s press release reads. I guess it’s all well and good that the credit isn’t going away, but we were already getting $200 million worth of that state-paid property tax credit.
It’s more than a little misleading to count that as though it were a new tax reduction.
And to call these state buy downs of property tax obligations a tax reduction is a little ridiculous.
For instance, Dalrymple is also talking up “$23 million in permanent property tax relief provided through a transfer of some social service costs from counties to the state.” So, for the 2015-2017 biennium, that’s $250 million in state-paid property tax credits and $23 million in the state buying up county social service costs.
That’s $273 million in what Dalrymple is calling tax relief. Only, that spending obligation still exists. Who is paying for it now? Why, you and me, because we all pay state taxes too don’t we?
The state buying up spending out of local budgets and putting it in the state budget isn’t tax relief. That’s a spending shift from local budgets to the state budgets. Because tax relief shouldn’t show up as an appropriation in the state budget, right?
According to the fiscal note prepared for Senate Bill 2206 the cost of transferring these social service costs from counties to the state is over $23 million in the 2015-2017 biennium, and over $31 million in the 2017-2019 biennium. The fiscal note for House Bill 1059 shows the cost of continuing and enlarging the state-paid property tax credit is over $252 million for the 2015-2017 biennium.
It’s like Dalrymple and the Legislature are scooping water out of one side of a pool and pouring it back in the other side and tell us that by these means they can lower the level of the pool. But ultimately every dollar our government spends – whether it’s in a local budget or the state budget – comes out of our pockets.
Maybe you could argue that the spending the state is accumulating is better off in the state budget versus local budgets, but we should talk about that as spending reform. Not tax relief.
The only real tax relief North Dakotans got out of this legislative session is the $123 million in individual and corporate income tax relief which the state House snuck past the Senate.