Legislators consider tax relief parameters
Range of topics discussed at forum
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Legislative leaders are aiming to achieve around $564 million in tax relief by the time the 2023 session comes to a close, Sen. Randy Burckhard said at a legislative forum sponsored by the Minot Area Chamber EDC on Saturday.
"The House wants income tax relief, and the Senate wants property tax relief," he said. "This is what I think we have come up with. It's a total of $564 million together."
Of that, $288 million would be income-tax relief, and $208 million would be property-tax relief. Another $68 million would be property-tax relief provided through changes to the Homestead Tax Credit for lower income seniors and people with disabilities.
As passed by the House, the Homestead Tax Credit bill raises the qualifying income and removes the asset limit.
Burckhard said the property-tax relief the Senate is proposing includes reducing the public school general-fund mill levy by another 20 mills, bringing it down to 40 mills. For a homeowner, that amounts to a reduction of about $90 for every $100,000 of house value.
The individual income-tax relief pushed by Gov. Doug Burgum and legislative leaders in House Bill 1158 proposes a 1.5% flat income tax rate and would eliminate income tax for nearly 60% of payers.The House-passed bill was amended by the Senate to instead exempt income in the lowest bracket and now is being considered by the Senate Appropriations Committee.
The House also passed House Bill 1118, which would impose a 1.99% flat tax and provides an income-tax credit. A Senate committee is considering that bill.
Definition of money
Legislators at Saturday's forum declined to step into the controversy that has arisen over the generally routine U.S. Uniform Commercial Code passed every session to standardize financial transactions among the states. The 109-page House Bill 1082 became controversial only after passed by both houses. Gov. Doug Burgum signed the bill March 21.
"This year they changed the definition of money. Some of the aspects have some people concerned that it is greasing the skids for a central bank digital currency," Sen. Bob Paulson said.
The definition includes only currency recognized by government, which some argue would give a potential central bank control over private finances.
Term limits
Still alive in the Legislature is House Concurrent Resolution 3019, which would substitute the term limits approved by voters last November with new term limits, if also approved by voters. Rather than eight-year limits in the House and Senate, the bill offers 12-year limits and allows individuals to run again and start the count over after sitting out for four years. Term limits also would apply not just to the governor but to all elected state officials.
The term limit provision added to the state constitution by voters restricts legislators from touching it. However, Rep. Dan Ruby said that could conflict with the Legislature's constitutional authority to offer constitutional measures to voters.
Ruby said eliminating legislators with longevity also forces newer legislators into positions of leadership.
"It's a lot to learn in that short amount of time. I'm not sure how they would even do it," Ruby said. "We may need to go to annual sessions just to give people more time working with the budgets, learning the process and getting some experience every year."
School lunches
Ruby also spoke about his opposition to House Bill 1491, which passed the House and now has a 6-0 "do pass" recommendation from a Senate committee. Initially calling for free school lunches, the bill was amended to pay for school lunches for students whose family incomes are up to 200% of poverty.
"The 200 percent of poverty is actually higher than the average wage earner in North Dakota," Ruby said. "That's going to people that aren't necessarily in need. If we help the people in need, that's fine."
School vouchers
House Bill 1532, which would spend state funds to support students in private schools, also has drawn opposition.
"This bill's original intent was to make it easier for families with children that are in public schools to enroll into a private school, and the original bill had a $3,000 tuition reduction to a private school," Rep. Scott Louser said. "It didn't come with any changes in accountability. It didn't come with any requirement for any student that wants to enroll - that, for instance, may have special needs."
It also applied to students already enrolled in private schools, he noted. At this point, the bill is calculated to cost the state about $24 million, he said.
Louser said a Senate committee declined his amendments to cover the cost through school district levies of up to 3 mills and to allow private school teachers to enroll in the state's teacher's retirement fund.
Roads and bridges
Ruby said the Legislature is looking at creating a flexible transportation fund that would enable the North Dakota Department of Transportation to partner with counties and townships using a variety of funding sources to support roads and bridges. Another bill also would create a discretionary transportation fund to match federal funds. Ruby said legislators will have to iron out how much money they want to dedicate to these funds.
Krebsbach said the Senate has been split on these funding solutions. However, she added, "The townships were crying for their roads to have more dollars to take care of the problems they have. So I'm sure we'll come up with some kind of agreement that will work."
Public employees retirement
Legislators are debating closing a pension fund for new public employees and creating a plan to address the unfunded liability. Louser said the House sent two bills to the Senate. One proposal would have local governments assist in paying for the unfunded liability for their employees, but Louser said the Senate is likely to favor a plan in which the state infuses all the money.
"I hope this plan works because at $1.9 billion unfunded liability, we can't keep putting gas into a vehicle that's breaking down," Louser said.
The Senate sent its own plan to the House. Sen. Karen Krebsbach said the Senate bill corrects problems that have been ignored over the years, resulting in the enormous unfunded liability.
Krebsbach, who served on an interim committee to look at the pension fund, said experts had stated the pension fund can be fixed without being closed.
"Not only did we have that advice from some of these people, the comments that I have received, from especially the state employees and even some of the political subdivisions, say don't do away with the defined benefit plan," she said. "I don't want us to jump into something that's not going to benefit the state or the employees because the big thing that this program has done for us over the years is recruitment and retention."