April 20th, 2012 - 9:42am
The Beacon Hill Institute, a well-respected think tank that has performed studies for the North Dakota State Government in the past (but has been drug through the mud of late by opponents of Measure 2), has produced a economic impact report for Measure 2 which would eliminate property taxes in the state.
What?s interesting is that the legislative committee with oversight on tax issues, as well as the state Tax Department, has specifically declined to do this sort of a study calculating the impact on the economy from eliminating the property tax. Per this Beacon Hill report, not only can the state afford property taxes, but the long-term impact on the state (going well beyond the scope of the oil boom) is profound.
You can read the full report below, and I encourage you to do so as it?s very readable and quite robust with facts, but this is from the summary:
The state projects budget surpluses well into the future and had over $5 billion in total fund
balances at the end of FY 2011. The ongoing surpluses indicate the tax rates are higher than necessary to fund government needs. ?
North Dakota can become an attractive location for businesses to site new capital projects. This would result in broadening of the state?s economic base thus making it significantly less prone to hardships during downturns in economic cycles.
The positive benefits to the private sector of the state?s economy brought about by eliminating property taxes are without question. Governments in North Dakota are well-funded; it may be time to give some of that money back to North Dakota?s taxpayers.
I think that last statement goes to the crux of the argument the coalition of big government interests opposing Measure 2 are making. They won?t admit it, but at the end of the day every one of the groups involved benefit from bigger government in some way, and they?re afraid that if we just start giving money back to the taxpayers, they?ll have diminished access to the all-you-can-eat buffet that the state budget has become.
Update: I got a call from Governor Jack Dalrymple?s spokesman Jeff Zent objecting to my characterization of the $5 billion in reserves as being available for property tax relief. He notes that many of these funds are assets, and that other funds are restricted by existing policy restricting or preventing their expenditure.
These are fair points, but a bit of a distraction, especially because the focus of the report above was about the economic impact of the measure. The legislature makes policy in the state, and can certainly unwind any policy restricting the expenditure of funds the state needs. Also, the larger point is that the state has huge amount of money in funds and assets already, with continuing big surpluses projected, so this argument that the state can?t afford the elimination of the property tax becomes a harder one to make.
BHI Tags: beacon hill institute, measure 2, North Dakota News, property taxes
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