Legislators have many important issues to act on as the 64th Legislative session comes to a close. One of the most significant for property tax payers is SB2206. The passage of this bill will mark a monumental effort with the state assuming the grant costs for county social services, while delivering meaningful property tax relief statewide.
SB 2206 is a key element of property tax reform. The state will allocate $23 million to take over the grant costs from the counties. This will reduce the county social service mill levy resulting in a direct savings to the tax payers. The measure creates greater equity of the burden of social service costs. Once enacted, citizens statewide will be paying a similar, and lower, tax rate for social services in every county.Social service costs in most counties have risen more rapidly than any other local government budget, which is why why this county budget has become the most dependant on local taxes, although county officials have little control over the costs. In Traill County for example, in one year the number of foster care cases went from five to 37. These sorts of costs and cost increases are why county officials and many legislators feel property taxes are a poor funding source for social services.
The bill will require a reduction in county budgets for the cost savings and then hold these budgets at their 2015 level with inflation for 2016. This addresses some concerns by legislators that counties would use the savings to enhance theat budget in other areas. "Although counties oppose artifical limitations, county commissioners accept some mechanism to regulate costs over the next two years, as we look ahead to the potential of additional tax relief in this area," says NDACo Executive Director Mark Johnson.
The bill also sets up a legislative committee and a work group to evaluate and develop a transition plan for the state to take over the full cost of county social services. Johnson adds, "county officials recognize it will take a lot of work in the interim to understand in detail how the various costs and full state funding of various costs need to be structured while maintaining quality service."
This is the fourth legislative session a concept of this nature has been introduced. But the first in which initial costs of $23 million have been included in the Executive Budget, and the first time the legislation has made it all the way through to a conference committee report. County and state officials have recognized this effort as true property tax relief while stressing the importance of keeping services local.
NDACo, numerous legislators and the executive branch have been working on multiple bills that fit into this complex and historic plan. Here is a description of the three bills that work together to accomplish the goal:
- SB 2206 sets forth the policy for the state taking over the grant costs.
- SB 2012, the Human Service Dept. Budget, includes the $23 million for the effort.
- SB 2144 is the Governor's Property Tax Reform plan which caps the maximum a county can levy and provides grants to those counties over 20 mills with extraordinary needs.
County officials across the state are strongly urging legislators to support this monumental property tax proposal.