Lawmakers Approve Social Service Funding, Kill Caps on Property Taxes

It was a successful day for counties at the ND Legislature with the resolution of two priority bills - SB 2206 and HB 1361.

Senators voted unanimously to kill the bill to cap property taxes (HB 1361). The bill would have established a property tax cap for counties, cities and townships. Under the bill, they would not have been allowed to raise taxes more than 3%. Senator Larry Laffen told Senators they heard no evidence in committee that taxing jurisdictions were taxing to a point where caps were necessary. He voiced concern that a 3% cap would encourage political subdivisions to tax to that level regardless of the need. A reporting requirement that was included in this bill has now been added to the OMB budget bill.

North Dakota House members took final action today on Senate Bill 2206; passing this landmark legislation with a vote of 75-15. The Senate approved the measure Friday 44-3. SB 2206 will fund county social services statewide for a two-year pilot program in calendar years 2018 and 2019. The funding will cost $160.7 million and will reduce property taxes roughly 6% with the elimination of up to 20 mills from county levies for the social services.

“This issue has long been a priority for counties. The North Dakota Association of Counties has been working on transferring the cost of county social services to the state for twelve years,” said NDACo Executive Director Mark Johnson. “North Dakota counties have little to no control over social service costs or the programs as these services are state and federally mandated. This is why property taxes are a poor fit for paying for social services.”

 “We appreciate the leadership counties have provided in moving this issue forward. This is the right direction for the state in order to provide permanent, meaningful property tax relief. Funding county social services will benefit citizens across the entire state and pays for a service the state is mandating the counties deliver,” said Representative Craig Headland chairman of the House Finance and Taxation Committee. 

The funding will be provided as part of a two-year pilot program. During the interim, the Department of Human Services will work with stakeholders on analyzing opportunities for improved efficiency and enhanced service delivery.  Preservation of local access to quality services and a focus on outcomes are critical aspects of this analysis.

This legislation becomes part of $1.3 billion in state funding for local services that is used to reduce the burden of property taxes.

View a video statement from Johnson on the passage of SB 2206 here: https://youtu.be/iod0DVMddx4