“Tax reform projected to decrease North Dakota revenue,” reads a headline from Bismarck Tribune reporter Amy Dalrymple.
That’s one way to look at it, I suppose. Of course, from the perspective of the taxpayer, it means more money in our pockets. Not only are North Dakotans benefiting more from the Trump tax cuts (the ones Senator Heidi Heitkamp and Democrats have opposed) than any other state in the union in terms of the federal tax liability, but that reform is resulting in lower tax burdens at the state level as well.
You can read a summary of the federal tax reform impacts on state taxes here. “The result is the state is projected to collect $4.9 million less in state income tax for the two-year budget cycle that ends June 30, 2019, according to the projections,” Dalrymple reports.
That’s the projection for the rest of the current biennium. The projection for the next biennium, the one lawmakers will be budgeting for starting in January, is much larger. Dalrymple reports that taxpayers are expected to see a reduction of $28.9 million in that two-year cycle.
Democrats, perhaps not surprisingly, are upset that the state will have less money to spend. Kylie Oversen, erstwhile party chair and current candidate for Tax Commissioner, griped to the Tribune about all the good things the government could do with that money if Republicans hadn’t let the taxpayers keep more of their own money:
“Those dollars that are now not coming into the state could be put to very good use in funding a lot of needs that we’re seeing, whether it’s mental health or higher education or infrastructure,” said Oversen, a former state representative from Grand Forks.
For his part Oversen’s opponent, incumbent Tax Commissioner Ryan Rauschenberger, points out there are benefits to the tax reform far beyond what these numbers indicate:
Rauschenberger said the analysis does not consider other economic impacts from the tax reform, such as farmers or businesses that are able to buy more equipment as a result of the tax reform.
“There’s an upside that’s not taken into account in these numbers is that more cash in the economy means more income, more jobs, more wages, which has a positive offsetting effect,” Rauschenberger said.
I have a feeling that Republicans are pleased that Democrats like Oversen have chosen to campaign against the tax reform.