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House Majority Leader talks income taxes, state employee pay

North Dakota’s House Majority Leader says there may be some tweaks to what Gov. Burgum proposed in terms of a “flat” income tax.

Burgum proposed a 1.5 percent flat tax, with some lower income people paying no tax.

Rep. Mike Lefor (R-Dickinson), appearing on Prairie Public's North Dakota Legislative Review, said there have been some informal discussions with his House caucus, as well as with Senate leadership.

"The discussions were, how do we put more dollars in relief to North Dakota citizens, as opposed to non-residents?" Lefor said.

Lefor said Burgum’s proposal has a $566 million price tag.

"What we're looking at right now, and whit I believe (Finance and Taxation Committee) Chairman Craig Headland (R-Montpelier) is going to move forward with is a two-percent flat tax," Lefor said. "But embedded in that would be about $265 million of tax credits, so that the lowest tier for North Dakota citizens actually goes away."

Lefor said the total dollar amount going to non-North Dakota citizens will be at $10 million. He said this would mean $371 million in tax relief to North Dakotans.
But Lefor said this is still a work-in-progress.

State employee pay

Lefor also said the pay plan for state employees for the next two years is still in flux – and will depend on the March revenue forecast.

The state’s Office of Management and Budget came up with a pay plan that includes a $90 million one-time market adjustment fund – and to give an average of 6 percent raises in the first year, and 4 percent in the second year.

"What we've decided to do in leadership is look at $75 million, and a 4 percent and 4 percent, embedded in budgets at this point," Lefor said.

But Lefor said this will depend on what that March forecast says.

"I'll tell you — if it looks as good as it does now, I will certainly advocate for that full $90 million, plus the six percent and the four percent," Lefor said. "I think we're just being a little cautious to make sure that we don't get some negative news that we haven't seen to this point."

That revenue forecast will be presented March 12 and 13.

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