National Association of Counties
Washington, D.C.


 Property tax measures, bills worry counties

By Charlie Ban

The call to eliminate property taxes can be a populist rallying cry, but the governments who rely on them take a much more sober attitude.

If a constitutional measure on North Dakota’s June 12 primary ballot is approved, anti-tax activists could force dramatic changes that the Legislature rejected roundly three years ago.

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• Click here to visit NDACo's Measure 2 resource page.

Measure 2 seeks to abolish property taxes by constitutional amendment, their revenue replaced with state funding determined by a complex formula administered by the Legislature. Local policy makers would be unable to fund their own projects to their liking and thus be reliant on the attention of legislators to allocate funding.

The measure’s proponent group, Empower the Taxpayer, says it would improve property tax policy.

The state Legislature, the body that would control the funding, voted down a bill with similar intent in 2009.

“They hardly had a discussion on it,” said Jeff Eslinger, the communications manager at the North Dakota Association of Counties. “The Legislature itself said it didn’t want this, but at least if they had passed the bill it would have been easier to fix. You don’t want to put tax policy specifics and dates in the constitution, it’s just not the right place for it.”

The state’s strong economy may have helped propel Measure 2 to the ballot. Since 2006, North Dakota has become the nation’s third-largest oil producer. And its lowest-in-the-nation unemployment rate is linked to the oil boom.

“When times are good, there’s an undercurrent of desire to keep the government from having too much money,” Eslinger said. “The problem is, most people don’t seem to realize there are different taxes and they fund different governments. That, and it’s easy to get people to sign a petition by asking them if they don’t like property tax.”

Trying to fund local projects without the authority to raise money as they see fit would be, to local governments, similar to performing brain surgery wearing oven mitts. And Eslinger worries that when the Roughrider State’s boom times wane, county budgets will be more vulnerable than before.

“When things get thin as they have in the past, the Legislature has passed costs down to the counties,” he said. “When they have total control over the budget, there’s no doubt they’ll do it again.”

Father east, a bill to repeal the state’s personal property tax passed the Michigan Senate. The tax covers vehicles and equipment not covered under the real estate tax. The House, however, has yet to introduce its own bill, which Michigan Association of Counties (MAC) Legislative Coordinator Deena Bosworth says expresses caution on the chamber’s part.

“We don’t expect the House to move quickly on this,” she said. “They’re more likely to go after income tax changes, if anything.”

Two amendments to the Senate bill, however, made Bosworth feel significantly better if it does go forward. MAC’s earlier opposition to the bill was motivated not by the proposed repeal of the tax, but by the lack of a guaranteed funding source to replace the lost tax revenue. One amendment was an assurance that the funding for local governments would be guaranteed, otherwise the repeal would fail, and the other changed the qualifications for reimbursement to offer it to more counties.

“We had significant reservations about any change where the Legislature would pay us an annual appropriation,” she said. “We had seen statutory promises that were not honored by later legislatures.”

The Pennsylvania Legislature is looking at a personal property tax repeal bill, but it would only affect school district funding, not counties.


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