HILLSBORO, N.D. — To former Fargo City Commissioner Tony Gehrig, North Dakota’s Section 4 property tax reform proposal will eliminate unfair taxation and promote growth in the state.
To Tom Eblen, a farmer and Trail County commissioner, this is a “bait-and-switch” scheme that shifts the tax burden elsewhere and places more burden on North Dakotans.
Gehrig was part of the panel leading the discussion on Bill 4 in Hillsboro on Tuesday. Eblen was part of the audience who was able to comment and ask questions to the four-person panel (two in favor, two against).
If passed in the Nov. 5 general election, Measure 4 would eliminate assessed value-based property taxes. States are required to establish local political subdivisions such as counties, cities, and school districts at the same level for the 2024 tax year.
Gehrig called this “repeal and replace.” He said local governments would need to raise more revenue as budgets expand, but there were many options to do so, including road tolls and bus taxes for schools. He also suggested that assets could still be taxed, just not based on appraised value.
Critics said lost tax revenue from out-of-state businesses and landowners would be transferred to North Dakota residents.
Eblen gave the example of farmers who rent from out-of-state landowners. “Do you think they’ll waive the rent on his land just because you let him go? That’s not going to happen,” Eblen said.
He said school districts have struggled to pass bond issues for school repairs and construction, and residents would balk at new forms of taxes.
Aaron Burst, executive director of the North Dakota Association of Counties, spoke out against Measure 4 during a panel discussion in Hillsboro on October 8, 2024. (Cory Erickson/Hillsboro Banner)
Aaron Burst, executive director of the North Dakota Association of Counties, which opposes Measure 4, said local governments don’t even have the authority to raise revenue in any of the ways Gehrig proposed.
Burst said during the panel discussion that he understands the frustration with property taxes, especially in areas where property values are rising rapidly, and recognizes that people want more action from Congress. Ta.
He said the $500 tax credit for primary residences passed in 2023 may not seem like a big deal to Fargo-area homeowners who pay thousands of dollars in property taxes. But he said the idea had value.
“I think we should separate the discussion about primary occupancy when it comes to property taxes and commerce,” Burst said.
Matt Perdue, policy director for the North Dakota Farmers Union, the state’s largest agricultural organization, opposes Measure 4 but supports property tax reform.
Perdue said he thinks farmers union members would have supported a measure to create an alternative to local government property taxes. He said this would “enable local authorities to make the best decisions”.
“Vote Yes” Next to Gehrig at the table was Charlene Nelson of Casselton, who led the effort to repeal the property tax in 2012.
She said property taxes are the worst kind of tax, comparable to capital gains taxes, which are not based on a person’s ability to pay but instead tax homeowners on increases in the value of their homes that are not available to them. said.
“We shouldn’t punish you for buying that fixer-upper and fixing it up,” she said.
Bruce Bowersox, a Hillsborough resident in the audience, said changing the state constitution to eliminate property taxes is a step too far without a solid plan for how to replace the revenue.
“I think that’s irresponsible,” he said.
The state estimates that passing Measure 4 will cost the state $3.15 billion over the 2025-27 budget cycle.
Darryl Osborne speaks at a forum debating the merits of a constitutional measure to eliminate the state’s property tax on Tuesday, October 8, 2024, in Hillsboro, North Dakota. Trail County Commissioner Tom Eblen is paying attention. (Jeff Beach/North Dakota State Monitor)
Nelson said lawmakers who support Measure 4 are already drafting a bill to address the issue in the 2025 legislative session. Supporters also argue that Measure 4 would make state governments more responsible for taxpayer money.
Nelson and Gehrig both said Measure 4 would lead to economic growth and reduce the state’s dependence on the oil industry and agriculture.
Nelson said the same type of tax breaks given to large businesses for economic development will be given to small businesses, leaving more money for residents to spend.
Nelson said he personally supports a sales tax over a property tax.
Perdue predicted the state sales tax would have to double and exemptions such as fertilizer sales could be eliminated.
Darryl Osborne of Hillsboro joined the discussion on Bill 4, undecided. He said a local sales tax would not work in Hillsboro and Trail County, which is close enough to Fargo and Grand Forks that residents can do most of their shopping in those cities. This benefits urban areas, but not local budgets.
He left the meeting still undecided, but he is sure of at least one thing.
“We are living beyond our means,” he said.
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