The June 12 election is quickly approaching, do you know how you will vote? The following is a fact sheet from Keep It Local North Dakota concerning Measure 2. For more information on Measure 2, visit keepitlocalnd.com.
▪ Measure 2 takes away local control – centralizes power in the legislature.
There are more than 2,100 units of local government where funding varies from community to community, county to county. Under Measure 2, these local governments will have to make funding requests to the state legislature.
Measure 2 says that the state legislature must “fully and properly fund all legally imposed obligations of local government.” That’s it. Measure 2 does not define what those obligations are; it would create great uncertainty and force local governments to compete in the legislature for resources.
▪ Measure 2 imposes one-size-fits-all government on North Dakota.
Measure 2 is simply unrealistic. It will be difficult for the legislature to determine the specific needs of each community or county. The result could be a one-size-fits-all approach. Voters know that what’s right for Williston is not right for Wishek; what works in Fargo will not work in Fessenden; the needs of Bismarck are not the same as the needs in Bowman; Grand Forks is not Garrison; Dickinson is entirely different than Drayton.
▪ Measure 2 will likely require other tax increases.
Measure 2 mandates that the legislature replace the revenue lost from the elimination of property taxes ($800 million annually) from other sources. It would be up to the legislature to determine how to offset the loss in revenue. As a result, it is likely the burden would simply be shifted to state fees and other taxes, such as income and sales taxes. Besides taking power away from local government, the only other thing Measure 2 accomplishes is that it dramatically shifts the tax burden.
▪ Measure 2 locks tax policy into the state constitution.
Measure 2 is not sound tax policy and it has no place in the state constitution. Voters must be wary of claims by Measure 2 proponents that North Dakota can rely on oil and gas tax revenue for local government funding – this would place most of the burden for local government funding on one industry in one part of the state. First, what these proponents ignore is the role outside market forces have on the oil and gas industry, making it a very unreliable tax base. Secondly, projections from the North Dakota Tax Department clearly show that a majority of oil and gas tax revenue has already been allocated through both legislative statute and constitutional mandate. If Measure 2 passes and becomes part of our state’s constitution, it will be extremely difficult to remove or correct.
▪ Measure 2 is a reckless, fundamentally flawed approach to property tax reform.
The property tax is the only truly local tax. Local citizens can now directly vote on local issues such as parks projects, water and street projects, and building new schools. Measure 2 takes this power away from local citizens – the voters – and places all the power in the hands of the state legislature.
▪ Out-of-state property owners would pay no tax but still receive services, costing North Dakota $126 million annually.
Currently, $126.8 million – or 16.7% – of all property taxes is paid by non-resident property owners. Measure 2 would leave this property untaxed. This will likely have several unintended consequences for North Dakota:
1) Out-of-state hunters will have more incentive to buy land for recreational use, yet pay nothing for local services and they would have even less incentive to rent the land for agricultural production.
2) Real estate speculators would have an incentive to buy up North Dakota’s relatively cheap land but have no real incentive to sell if the value does not increase immediately, since they can wait for years for prices to rise with no risk.
For more information visit http://www.keepitlocalnd.com