Cities should be able to choose to levy property taxes on state exempt land that includes hospitals, churches and non-profit organizations to pay for essential emergency services, Rep. George Keiser, R-Bismarck, told a House committee on Wednesday.

Keiser, a former Bismarck city commissioner, testifying before the House Finance and Tax Committee, pushed his bill that was met with opposition from health care and non-profit officials who told lawmakers that the bill could place a bigger financial burden on organizations that are already strained for cash.

The bill, which Keiser unsuccessfully pushed in 1995, would give cities the option to levy the tax on properties that are currently exempt under state law.

He cited Bismarck's 2009 budget, which shows that the city spends $17.1 million on public safety services but only collects $14.9 million in property tax revenue, the primary source of revenue for local governments.

"In Bismarck, about 50 percent of the property holders of our city get to pay 100 percent of $15 million," Keiser said, holding a map of the exempt properties scattered throughout Bismarck, which includes the airport and the state Capitol.

Arnold "Chip" Thomas of the North Dakota Healthcare Association said hospitals already provide essential services for themselves, including security and in-house ambulance services in some cities. He added that the bill unfairly singles out hospitals and other non-profits.

"Ten years ago, when this same bill was introduced, we pointed out that hospitals cannot be the deep pockets that local political subdivisions turn to in order to address their spending habits," Thomas said.

Keiser admitted that his bill would place a larger tax burden on organizations that he, as well as his wife, represents. His wife, Kathy, is with Ronald McDonald House Charities in Bismarck.

"I am on the hospital board here and the hospital board and the administration are probably not really excited that I have this bill before you," he said. "But I do, because I believe in it."

Gayla Sherman, speaking on behalf of the North Dakota Association of Nonprofit Organizations, said nonprofits have a state-mandated exemption from property taxes because of the services they provide.

"Donors intend all of the dollars given to nonprofits to be used to provide services and accomplish our missions, not to pay property taxes," Sherman said.

Rep. Louis Pinkerton, D-Minot, questioned whether or not Keiser's bill would make property tax policy fairer.

"We're trying to create fairness, but there's unfairness there no matter how we go," Pinkerton said. "This is a traditional way we've taxed property throughout the years, just like we have a lot of different traditions throughout the United States."

Bismarck City Commissioner Connie Sprynczynatyk, speaking on behalf of the North Dakota League of Cities, said they have no official position on the bill but that they support bills that give local decision-makers more power.

Keiser said Gov. John Hoeven's plan for $300 million in property tax relief is bad policy, adding the state should instead restructure its tax infrastructure, which was the inspiration for his bill.

"If our solution is to throw money from the state to political subdivisions in the form of property tax reduction, we ultimately will have a day of reckoning and we will fail," Keiser said.

The committee took no action on the bill, which is HB 1200.

(Reach reporter Brian Duggan at 223-8482 or brian.duggan@bismarcktribune.com)