Cuts ahead for taxes, spending proposals
Legislators face budget balancing
While tax relief remains a legislative priority, spending bills also are running well ahead of budget, according to legislators who spoke at a forum in Minot Saturday.
Rep. Scott Louser, R-Minot, said legislative committees face a deadline today for getting policy bills with fiscal notes of $50,000 or more or financial impact of $200,000 or more over to the appropriations committees. Each house has until Feb. 24, when bills cross to the other house, to work through those budget items.
“I think we are – for total requests out of policy committees – just under $2 billion worth of requested spending beyond what the budget is suggesting,” Louser said of the House alone. “So you can see what the Appropriations Committee has before them in February.”
Senate Majority Leader David Hogue, R-Minot, stressed that tax relief remains a legislative priority.
“At the inception of the session, I started talking about tax relief in the range of $400 (million) to $600 million for people in North Dakota, and so far, nobody has pushed back on that figure – not the governor, not the House, not our fiscal analyst. So I feel comfortable in saying that still looks like the number for tax relief,” Hogue said.
The question is the form the tax relief will take, he said.
“The House is definitely focused on income-tax relief. Their leading bill will provide approximately $360 million of income-tax relief to people in North Dakota,” he said. “The Senate is focused on property-tax relief. We have seven serious proposals to, in one way or another, reduce property taxes, and some of them call for the elimination of property taxes for folks who A) reach a certain age like 65, or B) have as their only property their primary residence.”
Hogue said he expects property-tax relief to come through a combination of bills. There is interest in ramping up the Homestead Tax Credit for low-income seniors and people with disabilities and in adjusting school funding, he said.
Asked about the history of rising property taxes despite legislative efforts to stem them, Hogue cited a recent study on the state’s property-tax relief over the past 20 years.
“It is what I would describe as a mixed bag. Right now, North Dakota is providing, every biennium, $1.6 billion to the political subdivisions to help hold down taxes,” he said. “The taxes are going up, but they’re going up at a much lower rate, and that is because of the money that we’re putting out to the political subdivisions.”
Hogue noted pay raises, school enrollment growth and inflation are among pressures on political subdivisions that drive taxes higher. He said some states have imposed property tax caps, but he said he doesn’t believe North Dakota is ready for caps due to the strong pushback that would occur over local control.
Rep. Jeff Hoverson, R-Minot, said he supports elimination of the property tax but there is no legislation that would do so. The House defeated, 25-67, a bill from Rep. Larry Bellew, R-Minot, that would have eliminated the tax for people aged 65 and older.
On the spending side, the Senate voted 47-0 on Jan. 25 to pass Senate Bill 2240, which would provide $900,000 to Minot for base retention and preparation for a missile field construction project at the end of the decade. It also provides $500,000 to each the communities of Grand Forks and Fargo to advocate for their respective Air Force and National Guard facilities.
However, a bill to fund school lunches for all public school students is in trouble, according to Hoverson, who serves on the House Education Committee.
“I think most on the committee are opposed to it. I am opposed to it myself. Right now, if there is a struggling family that needs help, the reduced price through the USDA is already (in place).”
Louser added the school lunch bill’s $89.5 million fiscal note would cover only about a third of meals for all public school students.
The Department of Public Instruction testified at the committee hearing Jan. 30 that the $89.5 million represents the cost based on the daily meal participation rate after calculating federal reimbursements. North Dakota’s public school 2022 fall enrollment was 115,385 students, but NDDPI reported the average daily meal participation rate was 88,000 lunches and 32,000 breakfasts.
According to the bill’s sponsor, LaurieBeth Hager, D-Fargo, 73% of North Dakota families do not qualify for free or reduced-price meals.