Vote preserves property tax in North Dakota, but changes likely

Stateline Midwest ~ July/August 2012

Nationwide, property taxes account for about one-third of total state and local government revenue. They could have been abolished this year in North Dakota in one fell swoop — via a proposed constitutional amendment that appeared on the June ballot.

North Dakotans overwhelmingly defeated the measure, but in the wake of the vote, lawmakers say they plan to address concerns about property taxes when they meet in 2013. According to The Jamestown Sun, ideas include extending the state’s homestead tax credit to all homeowners, paying the full costs of K-12 schools’ “core educational activities,” and the state takeover of certain services now provided at the local level.

The legislature has worked in recent years to ease local property tax burdens. The state, for example, has met its goal of funding 70 percent of the K-12 education system.

According to the Tax Policy Center, 23.2 percent of North Dakota’s total state and local tax revenue came from property taxes in 2009 — lowest rate in the Midwest. In contrast, Michigan and Illinois had the highest rate in the region, 40.1 percent. Over the past three decades, state and local governments’ reliance on property taxes has declined in all but three Midwestern states: Illinois, Michigan and Wisconsin.

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