On November 5th, you will see Measure #4 on the ballot, a measure that would in effect eliminate property taxes in North Dakota.
I am sympathetic to the notion of walking into the polling booth and dismissing your property tax bill. However, I would implore you to carefully consider the ramifications of such a decision, as it will have significant impacts on local control and delivery of services for our community.
Property taxes directly fund our local Police, Fire, and Street Departments, economic development, cemetery, library and airport (services like water, sewer, and sanitation are funded by fees for service).
Should Measure #4 pass, the State of North Dakota would be obligated to provide replacement revenues to political subdivisions in the amount of $3.15 billion per biennium.
The biggest concern we have as a city is the complete lack of an identified plan for the state to fund this potential new obligation.
The state would be forced to eliminate and/or reduce the allocation of existing revenue streams the City of Devils Lake receives from the state to pay for this pending $3.15 billion per biennium obligation. Some of these existing revenue streams include State Aid Distributions, Legacy Fund Highway Tax Distributions, and Prairie Dog Infrastructure funding.
The elimination or reduction of these funding sources as the state tries to fund their replacement payment obligations would have serious implications for the City, not to mention the lack of an inflationary clause in the measure to ensure additional revenue over time as operational inputs increase in price.
The city receives around $500,000 in state aid per year that goes directly into the general fund that basically serves as property tax relief. If this revenue source is eliminated or reduced as the state seeks to fund its new obligation, considerations on cuts to services or ways to raise additional revenue would have to occur.
The City is incredibly proud of the progress that has been made over the past decade in restoring and enhancing our street, water, sewer, and storm infrastructure. The City will have received a projected $9.5 million between 2020 and 2025 in prairie dog infrastructure funding. Much of this progress would not have been possible without this program, where oil and gas tax revenues are distributed to non-oil and gas producing communities like us. Our momentum and capacity to continue with needed and bold infrastructure improvements will be greatly reduced should the state eliminate this program to meet its new funding obligation.
Also noteworthy, a substantial portion of high value commercial and industrial property is owned by people or companies that reside outside the state. Walmart, Target, oil companies, etc. would see a reduction in their tax burden and Measure 4 would pass that burden on to North Dakota residents.
Are there justified frustrations surrounding property taxes? Yes. And as a mayor, a Commission Chamber with engaged citizens addressing us, expressing concerns and frustrations, is more encouraged than making us more dependent on the state than we already are.
The answer to frustrations regarding property taxes is to not make Bismarck the center of all decision making in the state and provide a financial windfall to out of state corporations.
Jim Moe, Mayor, City of Devils Lake, ND
Verified Oct. 3 – LAO
