Bismarck Tribune - North Dakota News - Look deeper into the issue of property taxes

Look deeper into the issue of property taxes

Mar 07, 2008 - 04:05:10 CST

By JACK KNUTSON
Bismarck

I've been reading recently about our state's huge revenue surplus ($540 million in 2007). So, what are we going to do with it?

I find it rather paradoxical, many states in the country are in deficit, struggling with costs, and North Dakota has a surplus. For many years, we basically have been a subsistence state, with limited opportunities or excesses. What a wonderful reversal of positions. We actually can lower our tax structure, thereby enhancing our standard of living.

I have always contended our property taxes are excessive. In larger cities in North Dakota, they are approximately 2 percent of the value annually. I inquired in Minneapolis and Phoenix several years ago, and my recollection is 1 percent and ½ percent respectively. This may not be exact, but the point is obvious: We are close to the highest in the country. Why? Do we make it up in lower state income tax? I am skeptical.

I challenge our county tax assessor to do a comparative study. Check a few regional cities outside the state and compare property taxes. Then have our state tax commissioner compare our state income tax with neighboring states. Sales taxes need to be considered also. A report to our residents would be informative and is necessary before we are asked to vote in November regarding state income taxes. We're always hearing about economic development. I contend having significantly lower taxes (both property and income) puts more money in the taxpayers' hands and enables economic stimulus from additional spending. If we want to encourage growth in North Dakota, we need to be competitive with our tax structure.

I do not pretend to have the answers. However, I do know that if property taxes were more aligned with the rest of this country, housing would be more affordable. Our property taxes are prohibitive.

I hope this surplus is used to reduce taxes significantly and not squandered on new expenses.

Merely reading this may not affect change. It is analogous to throwing a rock in a pond and watching the ripples dissipate. There needs to be a tidal wave of concern and interest.

News > Opinion

Printer friendly version Look deeper into the issue of property taxes

Comments

to editor wrote on Mar 13, 2008 3:07 PM:

" good question for ya why would you allow the comments for bismarck voter to go through but not mine? Like I said Biased Tribune "

to editor wrote on Mar 13, 2008 2:05 PM:

" SO what? i wanted to post it. It is about taxes maybe not property. Another good example of how The Biased Tribune depicts what the public sees. can't wait to to tell friends..coworkers about this one.. the list keeps going on. "

Online Editor wrote on Mar 13, 2008 1:13 PM:

" The state tax department does not regulate property taxes, nor does it collect them, nor does it have any responsibility to implementing them or taking them away. "

Bismarck Voter wrote on Mar 13, 2008 10:02 AM:

" I just finished my income taxes. My wife and I get a $401 (10%) credit on our income taxes for our 2006 property taxes. While it is good that some of my money is being returned, it isn't enough. Government officials should do more than give some money back...they should reduce property taxes. If they don't there should be an initiated measure to do so. "

CarrollS wrote on Mar 12, 2008 8:38 PM:

" Speaking of surplus, just how much does Burleigh County/City of Bismarck have in surplus? That fact never comes up. "

2 cents wrote on Mar 12, 2008 4:26 PM:

" Great Article. Agreed, property taxes in this town are outragous!!! The surplus is a ripe opportunity to bring property taxes down. There has been some rumbling about doing so in the past. Its time to give a little of that back to the people who pay those property taxes. "

Diggs wrote on Mar 11, 2008 3:32 PM:

" Allen - The only places I mentioned closing were Bottineau, Devils Lake, Mayville and maybe Valley City. Do I think it would be a loss to the community- yes, I understand that. But we have to face the facts that enrollement at those institutions has typically trended downward. Considering that high school enrollments keep dropping in North Dakota I don't see these four gaining much. As a Democrat, I would love to keep these open but when we are concerned about government spending and trimming the costs wouldn't you agree this should be considered. Maybe some of the funds expended on these three or four could be used to bolster Minot and Dickinson so they may generate more research dollars like UND and NDSU do for eastern ND. I think this would make the whole system stronger. It is tough , in my mind, to justify 10 public and two private colleges for a population of 600,000 people. "

Bismarck Voter wrote on Mar 11, 2008 1:35 PM:

" Allen, I respectfully disagree with your assertion that higher education in ND is insignificant in our over-all tax liability. It is true that higher ed is not supported by property taxes. But 19.1% of the total ND budget for 2007-2009 (or $468, 650,000) of our tax dollars (income tax, sales tax, etc) will go to support 11 public colleges and universities for state with just 640,000 people. My point is there are too many public colleges and universities, not that we shouldn't have any. I do however agree that colleges and universities can spur economic development. But consider that the University of Mary and Jamestown College as private centers for higher education, also bring in out of state tuition dollars, student discretionary spending and they employ a lot of people with good paying jobs. But they don't use our tax dollars to do so. So they really do a much better job of economic development than the public college and universities, don't they?

"

Allen wrote on Mar 11, 2008 1:31 PM:

" Diggs,

Do you even know how little of money goes to support those schools, and the economic impact those schools have on those communities and the state in general? Yeah I know, a couple million bucks sounds like a lot of money to small time thinkers but in reality it's peanuts compared to the positive impacts of these facilities.

And even better, do you want to see Williston, Dickinson, Minot, Bottineau, Valley City, Jamestown, Mayville turn into something akin to just about every other town in ND? E.g., one with a declining population leading to closing of businesses and the loss of that tax revenue as well.

There isn't a single example of where closing a university has been evaluated where it turned out to be a good idea in this entire country. And here we have people thinking it's progress. Shheeeessh!

Good grief, if anything boost your universities and increase enrollment so we can enjoy a stronger tax base that doesn't come from property taxes on homes! "

MamaMia wrote on Mar 11, 2008 12:23 PM:

" Hey you guys, stop picking on my nephew, Grumpy Old Republican! He and I don't always agree on things, but he sure is right on this topic. And, for your information, he is not "brain dead" for moving back to ND (where he was born and raised) to be near his mom and dad, to get away from the horrendous traffic, to live in a safe neighborhood and have high class schools for his kids to attend. It's just that the property tax issue is affecting us all, and he'd like to see someone do something about it. Is that so wrong? "

VoR wrote on Mar 11, 2008 10:35 AM:

" I used to live in Wyoming. We had no state income tax at all. But property and sales taxes were sky high. It's kind of rough on working people, but guys like Dick Cheney and his Hallibuddies did just fine, thank you very much. Now stop looking at this. Remember gay marriage & flag burning? We have an election coming up soon. Stay focused on the important issues. "

Diggs wrote on Mar 11, 2008 8:05 AM:

" Allen - you talk of how essential our university system is yet only mention two colleges -- that is the point. ND does not need 11 colleges. I think we could do nicely with the following plan: Keep Williston State, Bismarck State and Science School then afiliate these jr colleges with universities Williston with Dickinson& Minot, Bismarck with UND and ND Sscience with NDSU. This would keep a junior college in strategic areas and four major colleges in each region. The added bonus is that the junior colleges each have specialties that feed the larger colleges so students can start their education and finish it with some type of continuity. I graduated from a Valley City State and loved going there but enrollemnt has fallen and it is time to trim the system. Bottineau, Mayville, Valley City and Devils Lake are becoming too expensive to keep. Unfortunately, North Dakotans don't want to make the tough decision to insure future success.
As for your response to the squirreling away of money -- how much is enough? Why don't we learn from history as you say and watch the budget instead of planning for mispending? Not bad for a liberal, eh? "

Allen wrote on Mar 10, 2008 11:09 PM:

" P.S. Squirreling away a good chunk of money in a rainy day fund is not a bad idea. ANyone remeber what happened the last time we had an oil boom?

That's right, we foolishly thought it would last forever. So we spent it and kept spending it into eternity by assigning some of it to education. Then what happened?

you are right again, the oil money dried up and property taxes were raised to accomodate the lack of oil revenue.

Hello! ANYONE care to learn from history?
"

CarrollS wrote on Mar 10, 2008 11:07 PM:

" I agree with "Bismarck Voter" and "Diggs" and some others. But, I hope that by the time there is any real tax relief, our economy hasn't gone way south. It's happening right now. Come on legislators, you can do better for us. And why can't all that lottery money go to support education in this state?? "

Allen wrote on Mar 10, 2008 11:06 PM:

" Bismarck Voter,

You are way off the mark there. Our university system isn't even in the significant figures of the overall tax liability. As a matter of fact, a very darn good argument can be made that one of the better industries in the state as far as economic development is the university system. Look at the economies of the two biggest schools, UND and NDSU, then tell me what you see as far as tax revenue from those places. 1. They employ a lot of people at less than the national average for their education, but more than the average ND job. 2. Out of state students bring mom and dad's money from out of state to be spent here (not trivial sums by the way), 3. Millions and millions of federal and corporate research dollars are spent in the local communities paying sales and income tax.

Basically, cutting the colleges would be cutting out a huge part of our tax basis in this state. Certainly far more than could be saved by the paltry amount of support our students and universities receive from the state. "

Diggs wrote on Mar 10, 2008 1:01 PM:

" Let's see -- we have a surplus of revenue coming in. Lottery sales go to the general fund, an increase in the amount of oil revenues that can't be touched was passed last session, now we have legislators wanting a larger rainy day fund. I agree with an earlier comment dedicate a % of lottery sales to schools and mandate that to receive these monies counties must lower property taxes. If the surplus comes in at the 1 billion as projected -- Half of it should be refunded to the taxpayers of this state plain and simple. I agree with Deb that Sand's proposal and the other proposal requiring votes for purchases or increases in budgets larger than cost of living will not do it. I'm sorry but I don't want to have to vote everytime the City of Bismarck buys a firetruck or the county needs to pave a road...that's ridiculous, and you would under that proposal.
You will notice that NO ONE has come forth with a proposal on how the surplus should be addressed. Where is the Republican led Legislature and Governor??? Oh that's right ..... they want to keep more of it in a rainy day fund....excuse me, but I thought if you are for reducing government then you shouldn't need more of my tax dollars squirreled away to pay for government. "

Bismarck Voter wrote on Mar 10, 2008 11:20 AM:

" Where do all our tax dollars go? We are a state with about 640,000 people. Fewer people than many counties and cities. Yet we support 11 state funded colleges and universities (and just listen to the official from those institutions trying to get to the front of the line to get at the budget surplus); 50+ county governments (which means 50+ sheriff departments, court houses to maintain, county road departments etc) and who knows how many school districts. Because we are relatively large geopgraphically, we have more airports serving a small population, more miles of highways, etc. One ND historian, whose name escapes me dubbed it the "Too-much mistake". We have too many colleges and too many county governments to support with too few people. Thats where our tax dollars go! "

Deb wrote on Mar 10, 2008 10:08 AM:

" Grumpy Old Republican is absolutely SPOT ON. The property taxes in this state are ridiculous. It doesn't matter if you've lived here 3 months or 30 years - it's out of control. If anyone thinks that Duane Sand's proposal is going to fix things - you need to re-examine your life. The only cure for the problem is to redistribute the income taxes to cover the schools and the infrastructure & then FORCE the municipalities to lower the mill levies. We are an OIL STATE for the love a pete. There's TONS of money here. Why anyone has to pay 3 grand a year for a split level home is beyond my capacity to understand. "

jt wrote on Mar 9, 2008 7:55 PM:

" they need to lower the property taxes and fix the roads! I could give you several roads - 43rd ave, airway ave, 19th st south of century - and am not impressed with the gazillion $$ Washington St project - what a joke, they could of at least put in turning arrows so those of us turning off of washinton onto Rosser/Ave C were able to go more than 1 car a light! "

overcharged wrote on Mar 9, 2008 6:48 PM:

" To "Dumb North Dakotan" If you think you are not paying property tax because you don't own a home you need to think again. Anyone that rents property is paying the tax as part of their rent on behalf of the property owner. Taxes go up and guess what-rent increase will follow. I just spoke with a property owner in SD. She bought a 250,000.00 house. Her propery tax - 1800.00. In bismarck you would probably pay 5,000.00 on that property. With all the new construction in Bismarck you would think commissioners could control the tax. With out teachers being among the lowest paid in the nation you wonder where all that money goes? "

Rasmus wrote on Mar 8, 2008 12:44 PM:

" To All: If you think that your property taxes are too high, as I do, DO NOT SIGN the petition to reduce income taxes. "Taxpayer" does not know what he/she is talking about! Lowering income taxes will have the effect of raising property taxes. This was done by initiated measure in 1989 and our property taxes WENT UP! Senior citizens, if you do not pay federal income tax now, leave well enough alone especially if you are property owners. Many seniors were tricked last time and supported a similiar measure and were shocked when their property taxes went up! "

LR wrote on Mar 7, 2008 11:57 PM:

" AMEN brother! "

taxpayer wrote on Mar 7, 2008 6:27 PM:

" To all of you who think your property taxes are too high. I strongly encourage you to contact American's for Prosperity in Bismarck. Their number is 701-223-9887. They are the group that is heading the initiated measure to reduce your income taxes by 50 percent, however, I know they need help getting signatures and there is only a couple of months left to do so. They will drop off petitions if you are willing to help. I hope you can help. "

Dumb North Dakotan wrote on Mar 7, 2008 5:54 PM:

" I just moved back here from Montana. Just last year I licensed my car for $250 in MT. Two years before that I licensed that same car in ND for $80. So after two years MT still charged me more. My income taxes were $60 or so more per paycheck as well.

The catch is that MT doesn't have sales taxes so they make it up elsewhere. I don't buy a lot of stuff, and I don't own a house here so no property taxes. So far tax wise I'm happy with ND. After a house and some kids I might have to rethink that though. "

GreatWhiteNorth wrote on Mar 7, 2008 3:31 PM:

" When I lived in Alaska I got a check for $1,600 just because I lived there. The citizens of that State get the surplus, if there is one, as a direct refund each year. "

ndguy wrote on Mar 7, 2008 2:40 PM:

" The only problem I see with reducing property taxes or sales taxes or income taxes or any tax at the state level is the tendency of city and county governments to raise their taxes by an amount similar to the state's decrease. We're not going to get a tax decrease until the state, county and city governments as well as the park board and schools are all forced to comply. "

Deduct wrote on Mar 7, 2008 2:01 PM:

" Property taxes would not be an issue if they were just simply taken out of our payroll checks every pay day instead of us having to write one check a year.

Just imagine if we had to write one sales tax check a year or one federal income tax a year. Would we then complain about those taxes.

Taxes to pay for the services we get have to come from somewhere. Maybe we should increase the sales tax 3 more percent and forget about property taxes. "

BabyT wrote on Mar 7, 2008 1:51 PM:

" to: To Grumpy Old Republican.. Please don't bring out the cost of living argument again. That is for people who haven't left the state in 30 years. The cost of living in ND is well above average for the nation! Yes you heard right, over half the places in the US are cheaper to live in than us. We suffer from lack of services and competition, so local prices go up. Our dollar doesn't go nearly as far when compared to similar cities. Even right now we are competing with California and Hawaii for the highest gas in the nation, and we export oil as a state! "

To EB wrote on Mar 7, 2008 1:39 PM:

" The state does perform a comparison (the red book) at it is available at the following site: http://www.nd.gov/tax/genpubs/2006-redbook.pdf "

to JD wrote on Mar 7, 2008 1:23 PM:

" I know for a fact that there is no sales tax in MT, hence higher property taxes. I am not sure about SD or MN (although one post said that they don't pay tax on clothing), but I am sure that there are other taxes in thier states that make it even out. I think maybe most states would be pretty close if you would look at the overall taxes being paid in, property or otherwise. What boggles me is how the taxes from town to town in the same state, even right across the river from each ohter, can be so different. "

Dear Jack wrote on Mar 7, 2008 12:15 PM:

" Where should I send my contribution so you can run for office? Then all we'd need are a few dozen more leaders that can express their thoughts so clearly and logically. "

To Grumpy Old Republican wrote on Mar 7, 2008 11:56 AM:

" If MN was such a great place to live, why did you come to ND, take a pay cut, buy a dump and pay more in taxes? Based on your comments, it appears to be a brain-dead move? Or is it that your lifestyle is better in ND than in MN? Gets old being surrounded by a bunch of whining babies in our state. Life here is not that bad. There are very few states that can hold a candle to ND in terms of cost of living and quality of life. All of these whiners should try living somewhere else before they go off crying foul. "

LB wrote on Mar 7, 2008 11:55 AM:

" I definitely don't know how to solve this problem~but I would be willing to help anyone who does. My husband & I feel we're robbed every Feb. 15th when we pay our property taxes! I feel we concerned citizens should "put our foot down" & try to change these exorbitant property taxes to a reasonable amount~what would be the first step? "

EB wrote on Mar 7, 2008 11:44 AM:

" I wish some one would do a study as to the the entire tax picture. I realize property taxes are high, but on the other hand our state tax is very low compared to other states. May be the question should be what services do you consider to be in the top ten and how are these services going to be funded to meet the needs of our state. "

KG wrote on Mar 7, 2008 10:27 AM:

" In other states the proceeds from the lottery goes to running the schools. If North Dakota used the lottery money for our schools it would be one source that could then lower our portions of our property taxes that goes to the schools. What are they currently doing with this money? I had read several months ago in the tribune that the state was pleasantly surprised that the return was double what they had anticipated after 5 years (I believe they expected 30 some million but it was actually over 60 million). I also recall that in that article it sounded like the money just goes in to a general fund of the states that they can do with as they please. I tink it would be in everyone's best interest if it went to the schools that then should be deducted from our property taxes. DOES ANYONE AGREE?? "

Economic Conservative wrote on Mar 7, 2008 9:58 AM:

" How right you are Grumpy! My wife and I retired here to Peirce County in 2004. We purchased a small (30 acre) farmstead. The taxes on it went up almost 600% over what the former owner paid due to the previous agriculture exemptions. I can't imagine what it is like for a young family starting out with a first time home with property taxes what they are here. It's a problem that no one really wants to acknowledge. "

karen wrote on Mar 7, 2008 9:35 AM:

" Jack~ I totally agree with you~ TAXES ARE TOO HIGH~ and there is no excuse~ somehow the state loves to have this "{war chest"{~ but it is time to let loose and give breaks to the people~ they should lower property taxes ~ and quit spending money like drunken sailors~ only for what they want and think is important "

Grumpy Old Republican wrote on Mar 7, 2008 9:29 AM:

" JD, the STATE may be low on the totem pole, but that's due to the lower taxes on ag property. Homes in cities like Bismarck & Mandan are extremely overtaxed. My old house in the suburbs of Minneapolis was worth well over $200K and my annual tax bill was under $1700. Here my home is worth about half of my old one, and the taxes are tickling the $3K mark. MN's income taxes didn't come close to making up for it, unless you consider the fact that I made 3-4 times as much there.

Property taxes here are a huge burden on homeowners. It's a fact that can't be ignored. "

Dumbfounded wrote on Mar 7, 2008 9:09 AM:

" to JD- Do you think that our property taxes are lower due to lower property values? "

Dumbfounded wrote on Mar 7, 2008 9:06 AM:

" Part of the reason property taxes are so high here is the Parks and Wreck Department. They are up substantially higher than the rate of inflation. While your house may go up nine per cent in value in Bismarck, all of the departments seems to make a effort to drop the mill levy. That is except the Parks Department which just seems to rub their hands in glee and leave the mill levy the same. "

A. Metzger wrote on Mar 7, 2008 9:06 AM:

" I agree heartily on the comments on taxes. Also I am paying approximately more in the city of Bismarck than any other state in the union. I have a place in Arizona approximately the same footage in condo space in both places (Bismarck and Mesa) and pay 5 times more in Bismarck than I pay in Mesa, and a;; the same ammenities. If it was up to me I would leave Bismarck, but my wife doesn't want to leave at this time. "

DuWayne Hendrickson wrote on Mar 7, 2008 8:56 AM:

" Jack, you have a pretty good analogy of what I think every North Dakota citiizen wants. We have to find a new avenue for revenue for property taxes, if not all of the tax bill at least the portion concerning the schools.That will considerably lower a homeowner and landowners taxes. On my home in Minot,$1250 of my property tax bill is for our school. I also believe that the 115 million $ property tax rebate was the governor throwing us a bone.In one or 2 years property taxes could rise again and they would get the 115 million back and raise them a little bit. Just another good argument for this to be paid for by the state so we dont have to deal with increases that many people in ND cannot afford. DuWayne Hendrickson Republican candidate for Governor "

Law wrote on Mar 7, 2008 8:31 AM:

" You are right, a comparative analysis to other states including fees and other charges. I know MN has a much higher income tax rate and their property tax is lower. I know they exempt clothes from sales taxes. When I do my income tax this year I am going to also do a MN return just to see how much my tax would be in MN compared to ND. SD has no income tax but has more sales taxes and I would guess that their fees for services are higher but that would be speculation. "

Slim wrote on Mar 7, 2008 8:24 AM:

" Another suggestion for the $540 million surplus is to do something with the highways in ND. I recently drove Highway 31 which is west of Flasher to the South Dakota state line which is about 30+ miles. This road is a disaster. It is very narrow with no shoulders at all. I was driving a heavy duty pickup and there were places that were so rough I could only drive at 40 mph. There is another section of Highway 31 that goes from New Salem to Stanton and this is in similar condition. I was told that the southern section of 31 that goes into South Dakota was built in the late 1950's. This section of 31 definitely needs a "complete makeover" being that it is one of the "more traveled" roads that leads into South Dakota. Things are not going to get any cheaper so it is best to fix some of these roads now, not later. You all have a nice day. "

JD wrote on Mar 7, 2008 8:12 AM:

" Why does everyone insist on attacking our property taxes? From 2003-2007 ND ranked 4th lowest in property taxes in the country. 2008 rank is 6th lowest. We rank 36 in income taxes, 29th in sales tax. I really don't think that property taxes are the problem in this state as 44 other states have higher property taxes than ND. Property taxes are higher in SD, MT, MN and all other surrounding states than they are in ND. Let's find a new battle to fight. Our overall tax environment ranks 30th. Maybe we should work on individual and corp income taxes.
Source: www.taxfoundation.org "

Grumpy Old Republican wrote on Mar 7, 2008 8:09 AM:

" Well put, Jack! Property taxes here are indeed outrageous. I appreciate the fact that you bring this up without being a partisan hack, without pointing fingers at anyone in particular, and without claiming to have the miracle cure-all. "

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