Highway funding option: 'Property Tax'

Jun 8, 2018

Department of Transportation chief financial officer Shannon Sauer testifies before the Legislature's interim Government Finance Committee.
Credit Dave Thompson / Prairie Public

The chief financial officer of the North Dakota Department of Transportation told a Legislative interim committee transportation funding is recovering from the economic downturn in the oil and agriculture industries.

"In fact, we are slightly ahead of projections," Shannon Sauer told the interim Government Services Committee.

The projection for the 2019-2021 biennium is $1.29 billion in total transportation revenue. That’s up from $1.27 billion in the current two year period.

But federal highway funding is remaining flat.

"We're projecting that is going to hold steady through the remainder of the federal authorization act," Sauer said. "It might go up a little bit, but pretty flat."

North Dakota is projected to receive $673 million in federal aid over the two year period. That's the same amount the state is receiving during the current biennium.

Sauer told the Committee the aim is to have – as he put it – “adequate funding” for transportation North Dakota is projected to receive $673 million in federal aid over a two year period.

To that end, DOT is looking at options. One is what he called “value capture.”

"Public investments, such as transportation infrastructure, may increase the adjacent land values," Sauer told the Committee. "'Value Capture' converts a portion of the increased property value to public revenue, via some form of taxation, such as a property tax."

Sauer said that could raise substantial money for road improvement. He said the idea was discussed at a recent transportation funding symposium, held in March in Bismarck. And Sauer said it’s just in the discussion stage. The Legislature would have to approve that kind of plan.

Tags: