Here’s what that bill does, as passed by the House on a nearly unanimous vote:
The financial institutions tax rate goes from 6.5% to 6%. That’s a $2.4 million cut.
The number of corporation income tax brackets get reduced from three to two, and the bill lowers the top corporate income tax rate from 5.15% to 3.30%. That’s a $140 million tax cut.
The number of individual income tax brackets get reduced from five to three, and rates are lowered to .9% for the lowest tax bracket, 1.9% for the middle bracket, and 2.9% for the top bracket. That’s a $361 million tax cut.
In corporate and personal income tax reductions alone that’s a $501 million reduction in taxes.
Back in February when I wrote about the passage of these tax cuts I asked, “how much will the Senate water these cuts down?” It’s looking like the answer is quite a bit.
The Senate Appropriations Committee held a hearing on the bill this morning at 11:00am, and legislative sources tell me that the tax cuts are likely to be hacked down to the relatively paltry $125 million recommended by Governor Jack Dalrymple in his executive budget.
Dalrymple asked for just $100 million in personal income tax reductions, and $25 million in corporate tax reductions. The Senate committee, chaired by Senator Ray Holmberg, seems intent on siding with Governor Dalrymple on the matter.
It would be a real travesty to see this tax relief cut down. With the state awash in revenues, there’s no really good reason to keep taxes so high. The House reached a bipartisan agreement on broad and substantial tax relief, and for good reason. Nothing would do more to ensure North Dakota’s prosperity beyond what might or might not happen with the state’s oil boom like reducing tax burdens.
Unfortunately Governor Dalrymple, and the state Senate it seems, disagree.
This isn’t the final word, mind you. The committee hasn’t acted yet, and the Senate will have to negotiate with the House on what the final number will be. But this development indicates that the state isn’t likely to get what the House passed.