‘North Dakotans are fed up’
Minot legislator proposes property-tax constraints
After watching Minot’s tax bill rise for the second year, Rep. Larry Bellew, R-Minot, says local taxpayers have had enough.
“Minot and North Dakotans are fed up with taxes being raised without any consequences to those who raise them,” he said.
Bellew was joined by Sen. Oley Larsen, R-Minot, and District 3 Republican House candidate Bob Paulson at a news conference Tuesday to announce he will be introducing two bills in the 2019 session that are designed to give constituents more control over their property taxes.
“I can no longer sit idly by while homeowners are reduced to tenants in their very own properties, with taxing entities playing the role of landlords. Government should not be able to tax people out of their homes,” Bellew said. “We need property-tax reform that prevents government entities from raising property taxes without voter approval. We need serious property-tax reform with a revenue cap.”
Bellew is proposing a bill to limit the increase in property-tax dollars to no more than 3 percent a year without a majority vote of the people. If new properties or properties coming off tax exemption join the tax rolls, the 3 percent would apply beyond the new tax dollars these properties generate. The limit also doesn’t apply to levies necessary to repay debt.
A second bill would enable taxpayers to petition to place a preliminary budget on the ballot. If voters rejected the preliminary budget, the taxing entity could not adopt a final budget that levies more dollars than its current year budget.
A similar bill allowing referral of preliminary budgets had been introduced previously at least three times and all were defeated in the House, Bellew said. A bill to limit property tax increases was introduced last session and passed the House before failing in the Senate.
“I think we have more ammunition this time, especially in this area with what our local elected officials are doing,” Bellew said.
Actual mill levies provided by the county show nearly a 15 percent increase in the consolidated tax bill this past year for a Minot homeowner in Minot Public School District, assuming no home valuation change and excluding the loss of state buydown.
The biggest impact on the increase came from the City of Minot. The city is seeking about $26.6 million in tax levy for 2019 after asking for about $22.6 million for 2018 and just under $18 million for 2017. It is about a 48 percent increase since 2017.
The school district in 2017 levied for $24 million compared to $25.2 million in 2016. The district is requesting $23.88 million this year.
Ward County’s levy went from $22.5 million in 2017 to $23.78 million in 2018, or about a 5.7 percent increase. The county seeks to levy $23.33 million for 2019.
Minot Park District’s $7.29 million levy request for 2019 is the same as for 2018. It compares with $7.2 million in 2017 and $7.22 million in 2016.
“Over four years, to have a 1.3 percent increase, I am pretty proud of that,” said Parks Director Ron Merritt.
Minot Mayor Shaun Sipma said limiting the property-tax levies of cities would shift costs to special assessments, which already are controversial. The legislation also would be an attempt by the state to micro-manage local governments and would interfere with an entity’s long-term planning, Sipma said. If the City of Minot had adopted a 2019 budget at the same tax level as the 2018 budget, it would have to delay flood control and the Northwest Area Water Supply Project or cut 74 people from existing staff, which would affect services substantially, he said.
“What we did this year locks us into a financial position where we can hold the line for five years,” Sipma said.
Ward County Commission Chairman Alan Walter said holding property-tax increases to 3 percent would be difficult if the Legislature continues to take actions that force cost increases in county operations.
Both Sipma and Walter mentioned the proposed bills’ uncalculated costs of special elections, which local subdivisions would have to bear.
Schools would be less affected by a tax limitation because state law already limits the general fund to 70 mills and a miscellaneous fund to 12 mills, said Scott Moum, business manager for Minot Public Schools. Schools also can levy for certain other expenses, such as debt or reserves.
Like schools, townships have a mill levy cap that can’t be exceeded without a public vote.
Tax collections can rise even with a mill cap if the property valuation increases, which Minot saw in the past. However, in the last two years, property values have fallen about 10 percent, Moum said.
Jim Rostad, president of the Minot school board, said putting additional limits on school taxation is unlikely to have much effect.
“It’s probably something that we would come pretty close to on our own anyway,” he said of tax limit amounts.
Larsen said the Legislature has helped cut local property taxes by nearly 40 percent through efforts to fund schools, county social services and other programs. It also has provided tax relief to low-income elderly and disabled.
“We are doing what we can to provide this tax relief,” he said, adding the proposed bills should be part of that effort. “We need to put the brakes on it somehow, and I believe giving the constituents the vote and the choice to be engaged and be involved will help bring about some change,” Larsen said.