533: Should North Dakota end property taxes?

Plain Talk

In November, North Dakota voters will be asked to decide the fate of Measure 4. If approved, it would amend the state constitution to prohibit taxes on property values. It would also lock in an obligation for the state legislature to replace current property tax revenues to local government with other revenues, but only at 2024 levels, with no mechanism to change that level in the future.

On this episode of Plain Talk, we had a debate about that proposal. Making the affirmative case for it is former Fargo City Commissioner Tony Gehrig. Making the case against it is Robert Harms, a former chair of the North Dakota Republican Party who also served in the administrations of former governors Ed Schafer and John Hoeven.

Former state lawmaker Rick Becker, the chair of the committee sponsoring the measure, declined to participate in the debate, saying the Plain Talk podcast is the only place where he won't speak about the proposal.

Both Harms and Gehrig agree on some key issues. They say that property taxes are a problem in North Dakota in need of a solution. They both also agree that taxing property values is problematic. As property values rise, they drive almost automatic increases in tax burdens that aren't tied to local needs.

Where they differ is the nature of the solution. Harms argues that abolishing property taxes would shift too much power over local spending to lawmakers in Bismarck. He also said that it "freezes some unfairness" in the state constitution by locking in funding for local governments at 2024 levels. A local government that made a big bond payment in 2024 would continue to be compensated for it by state taxpayers well into the future, even after the bond is paid off. A local government that kept property taxes low, on the other hand, would be punished for their conservative budgeting.

For his part, Gehrig argued that eliminating property taxes would be an economic boon to the state, drawing new investment. During his time in office, Gehrig was an outspoken opponent of policies that seek to incent economic development by easing or eliminating property tax burdens, but he used that stance as an argument for Measure 4. "If you believe those policies work, then you have to believe in Measure 4," he said.

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