The Chamber urges members to reject N.D. Property Tax Measure

FMWF Chamber urges members to reject N.D. Property Tax Measure

Fargo, N.D. (February 29) – The Fargo Moorhead West Fargo Chamber OPPOSES the current initiated constitutional measure to eliminate property taxes in the state of North Dakota. If passed, this measure would drastically impact the trajectory of North Dakota, hindering economic vibrancy and reducing the state’s competitive advantage. There are currently proponents collecting signatures to place this regressive measure on the November General Election ballot. The Chamber encourages citizens to decline signing this petition.

“We urge our members and the citizens of North Dakota to decline signing this petition,” said Chamber President & CEO Shannon Full. “This proposed measure raises many concerns for communities across North Dakota. The most notable concerns are the bi-annual cost to the State of over $2 billion and the shift of control away from local governments.”

In summary, this ballot measure states:

• Political Subdivisions may not raise revenue through levying any tax on assessed value of real or personal property.

• Political Subdivisions may continue to levy tax, only if the tax was dedicated for the payment of bonded indebtedness.

• The State shall provide annual property tax revenue replacement payments to political subdivisions in an amount equal to what was levied in 2024.

“Simply put, this measure only eliminates property tax by raising other taxes and fees on North Dakota businesses and families,” said Chamber Executive Vice President Katherine Grindberg. “The Chamber supports a fair and balanced tax system that prioritizes the State’s global competitiveness; however, this measure is not a viable solution for the continued growth and prosperity of the State of North Dakota.”
 

Why would The Chamber oppose this?

The Chamber works diligently to promote and protect the FMWF community and its businesses. It isn't uncommon for initiated measures or proposed legislation to initially seem like a very beneficial idea or a simple solution, but when you begin to analyze the far-reaching impacts, unanswered questions or lack of preparation, these measures or pieces of legislation begin to become more of a threat than a benefit.

On the surface, cutting property taxes seems straightforward and beneficial. Yet, this is why The Chamber is opposing the current initiated measure in an effort to protect our community:

Public Services

Property taxes are collected by local governments (cities, counties, townships) to fund essential public services.

• Schools: Generally, 30 - 40% of annual budgets are from property taxes.
• Public safety: Law enforcement, fire, ambulance, etc.
• Public works: Road maintenance, snow removal, etc.
• Community services: Public parks, libraries, etc.

Local Control

The biggest concern is that this measure would take away local control of the local budget. Instead of local school, county and city officials readily available to listen to the concerns of constituents and ensure the budget fits the needs of the community, those political subdivisions would need to go to Bismarck and ask the legislature to fund a new school, or additional firefighters, or sewer systems, or road maintenance.

This would cripple the ability of our local governments to fund solutions to local problems or invest in opportunities as they would become dependent on the control of the state.

The lack of guaranteed local dollars would also put our rural healthcare, schools, public safety and infrastructure at an even greater risk, as funding from other taxes and fee sources are extremely low to virtually non-existent.

Shifting taxes and fees

If passed, local budgets will be frozen at 2024 levels. This is not a tax cut. This will force communities to find revenue from other sources such as major increases in sales tax and fees.

The State of North Dakota would take on a roughly $1.329 billion cost burden per year to fund local services. There have been claims that the State could use the Legacy Fund to pay for this (there is a current balance of around $9 billion in the Legacy Fund) but that does not solve this problem for the long term. Especially since this initiated measure is a constitutional measure, which would make it immensely difficult to reverse in the future.

The Chamber is monitoring this situation very closely and will be having continued conversations with business leaders, community members and elected officials.

View the full language of this measure.
 
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