Mayoral Candidate Forum: Budget Realities

It’s a tough picture. With a 3% cap on annual property tax assessments and inflation running around 5% each year for the past several years, just maintaining the status quo means we’re already falling behind. Costs are rising faster than our ability to keep up, so unless something changes, maxing out the 3% increase might not be a choice, but a necessity.

But that can’t be our long-term strategy. We can’t just accept that as the norm. To avoid locking ourselves into a cycle of automatic increases, we need to focus on two things:

1. Finding internal efficiencies: making sure we’re delivering services smarter, not just more expensively.

2. Growing the tax base: not by raising taxes, but by expanding the number of contributors through smart economic development, strategic investments, and pro-growth policies.

That means partnering with private industry, rethinking how we approach land use and permitting, and encouraging the kind of development that adds lasting value to the community. If we grow our economy, we reduce the pressure to raise rates just to keep up.

The 3% cap and cost increases in excess of that (due to inflation or other factors in the marketplace, e.g. tariffs or supply chain issues like the world price of oil) can pose a significant new challenge. That said, I am not in favor of assuming we just max out the 3% cap. Zero-based budgeting is a valuable tool to use so the process starts with a clean slate. Aside from savings and eliminating of expenses no longer needed by that method, the choices are limited to finding efficiencies, reducing activity, or increasing revenue. As the question implies, 3% cap if less than the inflation of 5% causes a problem. The local government subdivision do have options available to get more efficient via technology, stop providing a nonessential service, or adding revenue through increasing sales tax or increasing fees. All of these options will likely be considered. The cap does provide an ability for a vote of the people to grant additional budget authority.

No, I do not believe Minot should automatically max out its annual property tax assessment increase just because the state allows up to 3 percent. That mindset is part of the problem. Just because we can raise it does not mean we should. People are already being squeezed by inflation, higher insurance costs, and utility increases. The CITY needs to start living within its means – just like families and businesses have to.

Instead of leaning on yearly assessment hikes, I want to restructure how we use our existing sales tax to fund part of the services people rely on. Right now, 10 percent of the first penny goes to a property tax buy down, 15 percent to economic development, and 25 percent to improvements. The economic development dollars are not being used as originally intended. Instead of creating long-term, broad-based growth, we are using that money to buy things like wayfinding signs and to subsidize building renovations for a handful of property owners downtown, while the rest of the city gets nothing. What’s worse is what happens next. Some of these businesses shut down within a few years of getting the funds, or they kick out low-paying tenants to jack up rents, all after using public money to boost private property values. That is not economic development, that is taxpayer-funded gentrification. And the improvements fund often overlaps with infrastructure spending that is already covered by the second penny.

I would take that 50 percent, half of the first penny, and repurpose it into a First Responder Tax. That means sales tax would cover a portion of the cost for police, fire, and other essential services that deserve stable funding. But we should not keep raising property taxes to do it when we have other tools.

By shifting part of the funding for public safety to sales tax, we reduce the need to max out annual assessment increases, we relieve pressure on homeowners, and we create a more balanced and sustainable funding model for the city’s future. That is not just smart, it is long overdue!