The House Finance and Tax Committee has begun working on a property tax relief and reform bill.
The bill incorporates Governor Armstrong’s suggestion for increasing the primary residence credit, using a combination of state general funds and the proceeds from the Legacy Fund. That credit would increase from $500 to $1550, beginning in tax year 2025. And that would increase as earnings from the Legacy Fund increase. It also includes capping local property tax increases at three percent per year.
In testimony before the Committee, Armstrong said earlier attempts at just property tax relief didn’t work out, because of a lack of reform.
"So, I think the reform is really important," Armstrong told the Committee. "And I think the three percent cap on existing property tax budgets, with as much flexibility as we can build in, is a really great place to start."
Armstrong said he knows some people will have concerns with it.
"But I think the alternative is, either do the same thing we do over and over, and expect a different result, or do nothing," Armstrong said. "I don't think the North Dakota Citizens will stand for either one of those."
Representatives of city and county governments say they like the relief part of the bill, but they do have some problems with that three percent cap.
"That's when you are going to see reduction in services for citizens, are in the thing the property tax pays for," said North Dakota League of Cities Executive Director Matt Gardner. "That's generally going to be public safety, as well as street maintenance and snow removal."
Gardner suggested a cap tied to the consumer price index, or some other metric. He and North Dakota Association of Counties executive director Aaron Birst say they’re willing to work with the Committee on the reform piece. They both say it won’t be perfect, because the cities and counties are of all sizes, with different needs and options.
The committee will continue work on he measure.
Rep. Mike Nathe (R-Bismarck) is the main sponsor of the bill itself.
