GRAND FORKS – A ballot initiative to eliminate the state property tax could paint a dire picture for Grand Forks Public Schools if it passes on Election Day, district Superintendent Terry Brenner said Friday in district Gov. said at a meeting of the Issues Committee.
An impact study of the measure conducted by the North Dakota Educational Leadership Council found that Measure 4, if passed, would cost the state’s K-12 schools more than $617 million. However, this represents a “substantial portion” of the state’s education costs. The education budget is $2 billion.
Locally, the potential loss for Grand Forks Public Schools is between $30 million and $36 million. The district’s annual budget is $130 million.
“If we don’t have a plan to replace this, it’s going to have a huge impact…” Brenner told the Herald. “We are anxiously awaiting the results on November 5th.”
Measure 4 would end the payment of property taxes as they currently exist and require the state to pay the current rate going forward. Future increases will likely be funded by taxing entities through a variety of methods, including various fees and other forms of taxes.
If Measure 4 passes, it will be up to the Legislature to find the money to fill the $1 billion to $1.3 billion annual gap left in state property tax revenue. Supporters of the bill argue that the money could come from revenue from the state’s Legacy Fund, a public account that collects taxes from the state-run oil industry, which is currently worth more than $10 billion. I am doing it. Opponents say this leaves open the question of where the money will come from when the legacy fund runs out.
At this point, “there really isn’t an alternative” to addressing potential Congressional budget shortfalls, Brenner said at Friday’s meeting. Adoption of the bill could also upend the next legislative session and could impact other legislative priorities for the district, such as additional pre-K funding, board members noted.
Brenner said in an interview that it is too early to know where the necessary cuts will be in the district budget if Measure 4 passes. However, according to the NDCEL impact study, “Without property tax revenue or a solid plan to replace it, reduced funding could lead to program cuts, fewer teachers, and delayed maintenance. It could reduce the quality of education and impact academic performance for students in the state.”
Additionally, “this amendment would also limit the ability of school districts to raise funds through general obligation bonds. For growing communities and those in need of new or renovated schools, this restriction would limit the ability of school districts to raise funds through general obligation bonds. Maintenance projects may come to a halt,” the study said.
At Friday’s meeting, commissioners in attendance agreed on the importance of highlighting this issue to voters. Board member Amber Flynn said school districts and school boards want to be partners in property tax reform, and that school districts want and need those funds, while tax cuts move people into communities. He also said that he was aware that it would be helpful to
But she said she believes many voters don’t understand the unintended consequences of eliminating the state’s property tax.
“We’re not trying to avoid those conversations. There certainly needs to be some reform,” Flynn said. “But we all need to work together to understand how exclusion also impacts people’s bottom lines.”
Brenner added that if the bill passes, it would result in a loss of local control. According to NDCEL’s research, the proposed amendment would strip local school boards of their authority to make funding decisions. The voter-approved construction fund (money used to maintain school buildings) will disappear, and the supermajority vote of 60% by residents to approve the construction fund will also be lost, requiring that no such revenue be maintained or approved. There will be no option to vote. As a result, residents “lose the ability to decide what they want from their towns,” the study says, citing North Dakota’s Century Code.
“We’re just at the mercy of the state,” Brenner said.
A survey conducted by NDCEL appears to show a shift in public support for Measure 4 in recent weeks. Two months ago, survey respondents were pretty much split between yes and no votes, Brenner said at the conference. A survey conducted about two weeks ago found that respondents were far more likely to support not voting.
“That doesn’t mean anyone should take their foot off the gas in terms of talking about what this means for the district,” Brenner said.
The Government Affairs Committee will invite local legislators to its next meeting on Nov. 21 to discuss legislative priorities for the upcoming session.
