This is what happens when you cap property taxes; it’s not good

Property taxes — we all hate them. Naturally, as a result of our disdain, we seek to remove that which we don’t like. This attitude is prevalent in North Dakota. In the past, we’ve voted down initiated measures that sought to eliminate property tax; in the recently closed legislative session, the House killed a bill (HB 1380) that would have made property tax revenues subject to a cap on increases.

On the surface, that sounds pretty good; let’s limit government, right? But in all things government and life, we should consider the consequences before we take the attractive bait. And in the case of well-intended property tax legislation — what we typically end up with is some perversion of markets and the invisible hand. Yes, even government on government regulation results in inefficiencies.

The insidious part — it takes decades for these perversions to become obvious. And when we get to that point in the future, the political will to undo past mistakes is all the harder. Check out the article from the L.A. Times linked here and below for anecdotal evidence that there is truth in what you’ve read here.

And on the solutions to getting property taxes under control — let’s first start with root causes and try to figure out why our cities are not self-sufficient. Because there’s nothing about a property tax cap that makes plowing a street or paying a police officer any less expensive.