— Official News Release, Governor Dalrymple —
Gov. Jack Dalrymple joined legislators today to announce the passage of nearly $400 million in additional tax relief for the people of North Dakota as well as meaningful reform to the state’s property tax system.
“North Dakota’s strong economy and our long-standing commitment to sound fiscal management continue to drive our priorities for progress,” Gov. Dalrymple said. “Those priorities have always included keeping taxes low and returning tax proceeds to the people of North Dakota whenever possible.”
The tax relief package includes significant reductions in income taxes across all tax brackets as well as significant reductions in property tax. Since 2009, Gov. Dalrymple has worked with the Legislature to reduce property and income taxes by more than $4.2 billion dollars.
“Despite some concerns that tax relief would have an uphill battle this session, Republican leadership came together to pass a strong, comprehensive package for the people of North Dakota, said Sen. Dwight Cook, chairman of the Senate Finance and Taxation Committee and a member of the Governor’s Task Force for Property Tax Reform. “This is going to put money back in the pockets of working families, small businesses, and family farms and will help our already thriving economy continue to grow.”
In passing SB 2144, the Legislature also achieved lasting property tax reform by adopting the work of the Governor’s Task Force for Property Tax Reform. The task force began its work in December 2013, resulting in an 80-page rewrite of the state’s property tax codes.
“The Republican majority is strongly committed to ongoing tax relief for the citizens and small businesses that are the foundation of North Dakota,” said Rep. Craig Headland, chairman of the House Finance and Taxation Committee. “I’m glad we could work together to pass strong legislation that helps our citizens and our economy.”
Gov. Dalrymple has signed into law an additional $397million in property tax relief. The state’s 2015-2017 tax relief package consists of:
- $250 million in property tax reductions to be provided through a state-paid tax credit during the 2015-2017 biennium. With the continuation of this program, all North Dakota property owners will again receive a 12 percent reduction in property taxes.
- $123 million in individual and corporate income tax relief.
- $23 million in permanent property tax relief provided through a transfer of some social service costs from counties to the state.
- An expansion of the Homestead Tax Credit program for seniors who live on a fixed income. The Legislature appropriated an additional $1.2 million to support increased eligibility for property tax reductions during the second year of the 2015-2017 biennium. The program will save qualifying North Dakota taxpayers about $21 million during the biennium.
PROPERTY TAX REFORM
The Legislature followed Gov. Dalrymple’s recommendation to not only provide additional tax relief during the 2015-2017 biennium, but to also reform the state’s property task system. The Governor’s 14-member Task Force for Property Tax Reform analyzed all 200 mill levies authorized by all political subdivisions other than school districts, as well as the processes used to assess and collect property taxes for funding of local government services.
Significant property tax reform has already been achieved within the state’s school districts. The 63rd Legislative Assembly provided more than $850 million in property tax relief for the 2013-2015 biennium, including about $656 million provided through a new K-12 school funding formula that shifted the largest share of education costs from school districts to the state.
Senate Bill 2144 creates greater transparency in the property tax system so that taxpayers can more easily understand the uses of their tax dollars. The tax reform also provides for greater spending discipline and allows for more meaningful comparisons of property taxes levied among political subdivisions. Key elements in the property tax reform include:
- The consolidation of tax levies and the repeal of 40 others, some of which were created before statehood and have not been used for decades.
- Required anniversary votes of the people to ensure that taxpayers understand and support the continued use of their tax dollars.
- Mill levy limits for improved spending discipline.
- Greater flexibility for political subdivisions to develop their operating budgets.