BISMARCK – North Dakotans should get another chance to vote on abolishing property taxes, according to Minot residents who spoke in support of a proposed constitutional measure heard by the state House Finance and Taxation Committee Monday.

House Concurrent Resolution 3024 is sponsored by Rep. Jeff Hoverson, R-Minot, with Reps. Larry Bellew and Lori VanWinkle, both R-Minot, among co-sponsors.

Voters in 2012 rejected a measure to abolish property taxes by a three to one margin. Former state legislator Rick Becker of Bismarck attempted to initiate another measure in 2020 that never got off the ground and is the chief proponent behind HCR 3024, addressing the legislative committee at length.

HCR 3024 would put a measure on the ballot that would prohibit the state and all political subdivisions from levying a property tax after Jan. 1, 2025. Instead, the state would provide replacement revenue that at least equals the property taxes levied in the most recent calendar year. Political subdivisions with bond issues would be able to continue to collect property taxes until those bonds are paid off.

Becker said the state would need to replace about $1 billion of the $1.41 billion now paid by property owners, of which a portion comes from sources not being eliminated, including centrally assessed taxes. He said property taxes could be replaced using $125 million in existing Prairie Dog infrastructure funding, $125 million from oil-tax earnings in the Legacy Fund, $50 million in Bank of North Dakota profits, along with excess revenue and a 1.25% budget cut, which together would free up $550 million.

The resolution allows for a 3% property title transfer tax if needed to raise another $150 million for the property-tax replacement fund. The Legislature recently had eliminated that tax, and the North Dakota Association of Realtors asked the committee to strike that provision from the resolution.

Becker said eliminating property taxes will increase other revenue, especially sales tax revenue, because of the boost it will give to the economy.

Steve Moen of Minot said property tax is where the Legislature needs to direct tax relief.

“Income tax isn’t the problem. Property tax is,” he said. “But the biggest thing on this is I think we should let the people vote on it.”

Scott Samuelson of Minot said his taxes have increased 347% since he purchased a home in 1992, despite the state buying down property taxes.

“The citizens of North Dakota have been asking the Legislature to do something to remedy this unjust property tax system for years. It is now time to eliminate and replace unfair property taxes with other funding sources,” he said.

Samuelson said redirecting the increased spending by the state would cover most of the amount necessary to replace property taxes.

“It is past time for the citizens of North Dakota to directly benefit from our state’s prosperity,” he said. “When cities and counties look at economic development, they offer property tax relief and other tax incentives. The State of North Dakota also gives tax breaks and tax incentives for economic development. Just imagine the economic boom if everyone in North Dakota received a property-tax relief, thereby providing an increase in our state and local revenues.”

Minot-area resident Patti Eisenzimmer agreed.

“If we can put all the money back into the economy that we are paying for property tax right now, everyone will be further ahead in our wonderful state,” she said.

“Citizens of North Dakota were supposed to be the benefactor of the state’s wealth,” VanWinkle told the committee. “This would be such an incredible financial boost and benefit to our citizens, an economic surge to our communities and make North Dakota one of the most attractive states to live, start a business, raise a family and attract new corporations.”

Mike Blessum of Minot said his 25-year-old daughter just had her escrow payment go up $100 a month, which is beyond the amount

she budgeted when purchasing a home last fall.

“The governor has made it a priority in his forward outlook to keep my daughter and people like her in this state. This is how you do it,” he said. “Give the people a chance to look at property tax.”

Opposition came from the North Dakota Association of Counties, League and Cities and School Boards Association.

Donnell Preskey, government/public relations specialist with the Association of Counties, said reported property taxes collected by counties have gone down since 2017. She also noted 84% of voters in 2022 approved to continue or increase property tax levies, primarily for roads. The proposed measure also fails to include any mechanism for increasing state payments to political subdivisions to keep up with inflation, she said.

Legislators on the House committee also voiced some wariness. It was noted the resolution would distribute taxes through a different source but not provide tax relief.

Rep. Dick Anderson, R-Willow City, voiced concern that lack of property taxes will bring out-of-state competition into the acquisition of farmland, pricing local farmers out of the market.

“If you can buy property in North Dakota and not pay any tax on it, I think eventually most of the farming land in our state will be owned by nonresidents, and I don’t think that’s good for our state,” he said.

Becker responded that, without property taxes, North Dakotans will have more discretionary income to compete, but Anderson argued that money won’t be nearly enough.

Sen. Jeff Magrum, R-Hazelton, a resolution co-sponsor, suggested an amendment to abolish property taxes only for residents. He said voters are clamoring for property-tax relief, and the measure left alive by the state Senate for a 30% property-tax buydown is being watered down to 20% in the House.

Magrum encouraged the committee to advance a ballot measure, reiterating Becker’s remarks that there likely will be a citizen-initiated measure that isn’t as well crafted if legislators turn down this opportunity.

“There’s going to be a measure, and then we’re going to have to deal with it anyway. So it would be good if we take the bold approach and do something this session,” he said.