Majority turns back effort to abolish property taxes in North Dakota

More than 76 percent of North Dakota voters said “no” to abolishing the state’s property tax in yesterday’s initiative vote. The proposal – also called Measure 2 – would have amended the state’s constitution and made North Dakota the only state in the U.S. without a property tax. Opponents of the measure said that ending the property tax would drain the state fiscally: the tax represents 23 percent of North Dakota's state and local tax revenue. Proponents argued that the tax was a burden to homeowners and inhibited economic growth opportunities.

Property taxes are primarily a local government tax, accounting for more than 70 percent of total local government tax revenue, according to the U.S. Census Bureau. Thirty-seven states* impose state-level property taxes (in addition to the local-level taxes, which are levied in every state). State property taxes made up 1.8 percent of total state government tax revenues in 2011. In the most recent fiscal year, North Dakota saw its property tax revenue jump considerably – 44.5 percent year-over-year – primarily due to the oil boom the state has experienced. That’s the biggest year-over-year increase of any state and about twice as much as the next state, Alaska, which saw a 22.4 percent increase in property tax revenue.

The importance of property tax revenue varies from state to state, with some relying more heavily on the tax than others. For example, in Vermont, a significant 35.5 percent of the state’s revenue comes from property taxes.  For states like Indiana, Florida and Nebraska, however, less than .01 percent of state tax collections come from property taxes.

State Property Tax Revenue as a Percent of Total State Tax Revenue, 2011


Author’s calculations from the U.S. Census Bureau, 2011 Annual Survey of State Government Tax Collections

*States without a state property tax: Colorado, Connecticut, Delaware, Hawaii, Idaho, Iowa, New York, North Carolina, Oklahoma, South Dakota, Tennessee, Texas and Utah.