Counties Anticipate Property Tax Challenges

The following is a Letter to the Editor - written by North Dakota Association of Counties Executive Director, Mark Johnson

It’s that time of year, when the words “property taxes” are a big topic of conversation. It’s that time when your local governments are setting their budgets for 2018 and are making tough budget decisions. Each county, city, school and park board are all setting their budgets based on needs and public support for services.

There are some important changes in the upcoming budget cycle that will impact your property taxes based on legislative actions this past session. Your local decision-makers are taking those changes into consideration. Counties, like state government, are experiencing significant reductions in non-property tax revenues that have been impacted by changes in our state’s economy.

The biggest change for taxpayers however is the loss of the 12 percent state-paid property tax credit. You may recall from your last several property tax statements that there has been a line stating: “Less: 12% state-paid tax credit.” Lawmakers recognized last session that this tax credit was not sustainable for the future with the dramatic reduction in state oil tax revenues, so they repealed it in favor of a smaller but more permanent form of property tax reform. Going forward, the state will fund county social services. We feel this is appropriate because counties have no control over social services. These services and their costs are controlled by federal and state mandates. For that reason, counties do not feel property taxes are the appropriate source of revenue.

This is a two-year pilot project. Over the next two years, counties will not levy for social services and instead those services will be funded with state dollars. Prior to this legislative action, counties were allowed under state code to levy up to 20 mills for social services. Since each county levied a different amount, the amount of property tax relief will differ county-by-county and may not equal what citizens received under the 12 percent property tax buy down plan.

It’s important to recognize the level of property tax relief provided by the Legislature over the last several years. Lawmakers’ actions to fund social services is in addition to the commitment they have made to reduce the property tax burden by funding a greater share of the local cost of education. Together they total $1.3 billion in property tax relief in the next biennium. The tax relief they have passed on to you will be noted on the top of your tax statement.

Local governments make their decisions based on feedback from the public. And that’s very important. Local governments have transparency. You, the public, are notified of their meetings. They are open to anyone, and you receive a notice if they plan to increase any mills to balance the budget. Your voice does matter in this process.

Property taxes fund pretty much every service you depend on at the local level. It is law enforcement protection, jails, local highway and road maintenance, snow removal, elections, fire protection, ambulance, public schools, public health, transit, local parks and recreation, county fairs and so much more.  I hope this information helps you understand your property taxes and the changes that may affect them. 

*This Letter to the Editor was forwarded to North Dakota newspapers