City and county administrators who object to limits on their property tax collections may be given a choice, a key legislator says. If local governments don't want to accept the restrictions in exchange for state-financed property tax cuts, they may have the option of refusing the money - if they're willing to risk a voter rebellion.

Sen. Raymon Holmberg, R-Grand Forks, the chairman of the Senate Appropriations Committee, raised the possibility Wednesday during a hearing on legislation that would impose a 5 percent limit on annual growth in property tax revenue.

The caps would affect cities, counties, school districts and other local governments. They would be applied against each local government's highest amount of property tax collections in the previous three years. The limits could be overridden with voters' consent, or in emergency situations.

The legislation includes $116.7 million in state oil tax collections to finance local property tax discounts during the next two years. Homeowners would get 10 percent discounts on their property tax bills while commercial and agricultural landowners would get a 5 percent reduction.

Local government representatives protested the limit on property tax revenue growth. County officials prepare property tax bills, and Wagner said the discount proposal would be difficult to administer.

"Caps on local budgets potentially hinder the quality of life of our communities," Wagner said. "If other states that have implemented these restraints are any indication, basic services like public safety, social welfare and transportation systems will see reductions in funding."

The bill is HB1051.