Measure 2: State of Prosperity or State of Chaos?

The following is the May Highline Notes editorial, written by Scott Handy

I didn’t make the headline up – it is the title of a recent Fargo Moorhead West Fargo Chamber of Commerce event to examine the pros and cons of Measure 2. Measure 2 is an initiated measure to abolish property taxes in North Dakota. It will appear on the June 12, 2012 primary ballot. For the record, Cass County Electric, along with our state association, nearly every other electric cooperative in the state and a coalition of over 80 other organizations has taken a position of opposing Measure 2.

But before we get into why we encourage a “no” vote on Measure 2, a brief civics lesson is in order. Measure 2 came to be on the ballot through a process called “initiative.” This process in North Dakota allows the state’s voters to decide a question if supporters can get enough signatures to place it on the ballot. In this case the question is whether or not the state’s constitution should be amended to prohibit the imposition of a property tax that is determined using the assessed value of the property.

North Dakota is one of 16 states that allows citizens to initiate a ballot measure to amend the state’s constitution. We as citizens have had that right since 1914 for indirect initiated constitutional amendments, and beginning in 1918 we’ve had the right to initiate direct constitutional amendments. (Measure 2 is a direct constitutional amendment.) There have been 25 successful initiated constitutional amendments in North Dakota.

To get an initiated constitutional amendment on the ballot, supporters must get signatures from eligible voters equal to or greater than four percent of the population, or about 26,000 signatures in North Dakota. Measure 2 supporters brought in over 28,000 valid signatures.

Now, what about Measure 2 itself? Supporters claim passage of the measure will lead to a reduction in the size of government, brought about by eliminating about 12,000 state jobs. Opponents counter that these state jobs are necessary to provide the level of service citizens want, and that the property tax revenues will instead be replaced by dramatically increased sales or income tax rates. Opponents point out that making the state legislature responsible for funding local political subdivisions such as school districts, counties, park districts, fire districts, etc. shifts control away from local communities. Proponents claim that local control will not be compromised by shifting funding responsibility to the state.

One thing is clear in this debate that should be a cause for alarm for electric cooperative members and customers of telecommunications companies in North Dakota: there will not be an elimination or even a reduction in our industries’ property taxes. The reason is simple and has been confirmed by the North Dakota Legislative Council – only property taxes based on assessed value get eliminated if Measure 2 passes. Property taxes calculated on the basis of electricity sales (as ours are) or a percent of gross revenue (as for the telecommunications industry) will stay in place. Cass County Electric paid over $1 million in property taxes in 2011. If Measure 2 passes we will continue to pay at least that much while entities such as Xcel Energy and Otter Tail Power Company would see their property taxes eliminated.

Even though we urge you to vote “no” on Measure 2, we strongly encourage you to cast an informed vote. Read up on both sides of the issue, including reading the measure language itself. The North Dakota Legislative Council has produced a thorough and objective analysis of the measure and raises a number of serious concerns. If you’re inclined, you may also want to read the Beacon Hill Institute (a Boston think-tank) “report” on the benefits of Measure 2. You can find links to these resources in the article on Measure 2 in this issue.

 While I plan to vote “no” on Measure 2, we recognize that Measure 2 supporters have worked hard to collect the 28,000 signatures needed to get this on the ballot. There are many concerns about property taxes in North Dakota and Measure 2, whether it passes or fails, has created an informative public discourse. No matter the outcome, some type of property tax reform is very likely in the near future.

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One Response to Measure 2: State of Prosperity or State of Chaos?

  1. flamemeister says:

    If you have to continue paying taxes (and I am not sure it will end up that way), then nothing will have changed as far as you are concerned. Right? But if employees of Cass County Electric have homes, they will no longer pay property taxes. I’m not sure whether this is cutting off your nose to spite your face or dog in the manger.

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