North Dakota Property Tax Amendment, Measure 2 (June 2012)

Property Tax Amendment
Quick stats
Type:	Constitutional amendment
Constitution:	North Dakota Constitution
Referred by:	Empower the Taxpayer Committee
Topic:	Taxes
Status:	On the ballot

A North Dakota Property Tax Amendment, Measure 2 will appear on the June 12, 2012 statewide ballot in North Dakota as an initiated constitutional amendment.

The measure proposes eliminating property taxes throughout the state, starting in 2012. The measure was proposed by a group called Empower the Taxpayer in March 2010 and approved for circulation by the North Dakota Secretary of State in late March. Specifically, the measure requires legislature to replace local governments' property tax income with state tax revenue. A similar proposal was rejected in 2009 by the North Dakota Legislature.

On April 29, 2011 the Secretary of State Al Jaeger confirmed that supporters collected sufficient signature to qualify the proposed measure for the statewide primary ballot.

Text of measure

The measure as it will appear on the ballot reads:

This initiated constitutional measure would amend sections 1, 4, 14, 15, and 16 of Article X of the North Dakota Constitution and repeal sections 5, 6, 7, 9, and 10 of that same article, eliminating property taxes, poll taxes, and acreage taxes, effective January 1, 2012. The measure would require the Legislative Assembly to replace lost revenue to cities, counties, townships, school districts, and other political subdivisions with allocations of various state-level taxes and other revenues, without restrictions on how these revenues may be spent by the political subdivisions.
YES – means you approve the measure as summarized above.
NO – means you reject the measure as summarized above.

Support

In November 2009, Robert Hale, a Minot, North Dakota resident announced that he was in the process of forming a committee, known as the Empower the Taxpayer committee, to propose the measure. According to Hale, the ballot language was similar to that of Rep. Dan Ruby's proposal during the 2009 legislative session. The proposed legislation called for amending the North Dakota Constitution to remove property taxes as a sources of state revenue. The measure is also sponsored by Charlene Nelson of Casselton, North Dakota.

Supporters

• Robert Hale
• Charlene Nelson
• Empower the Taxpayer committee
• North Dakota Policy Council

Arguments

• In response to arguments that removal of the property tax may lead to questions about other types of taxes that are intended as property tax substitutes, sponsors of the proposed amendment said that issue could be resolved by "specifying that some types of taxes are not based on their property value."

• Supporters of the measure also argue that eliminating property taxes may make the state more attractive to businesses, which may lead to increased revenue for the state. "This would remove the property tax disincentive across the state. I believe that we would see many industries taking a very, very serious look at this state as a place to settle," said Hale.

• Charlene Nelson, chairman of the sponsoring committee for the constitutional amendment, responded to concerns over the details of the amendment, specifically, what the phrase ‘legally imposed obligation' means, saying, "It is a constitutional measure. It can’t contain every single detail. The details are determined by statute. The constitution is the principle, the details are the law."

• In an article for the Grand Forks Herald, Brett Narloch, executive director of the North Dakota Policy Council, uses data from a Beacon Hill Institute study on the effects of eliminating property tax in the state to highlight the measure's possible positive impacts on the state's economy. According to the study's findings, private employment would increase by more than 13,000, private investment would see an increase of $980 million, and there would be a $1,430 rise in disposable income per capita. The authors of the study believe the positive benefits, from eliminating property tax, to the private-sector economy are certain. Narloch further states that the measure would create a fairer business climate, thus helping to diversify the state economy.

Opposition

Opponents argue that it is dangerous to "eliminate an entire source of revenue" and that the proposal is misleading. The proposal, they argue, may appear like a tax cut but may instead force other state taxes upward in order to compensate.

Opponents

State Chamber of Commerce President Andy Peterson spoke out against the measure saying, "This is an extremist measure and we think it should go away," Peterson said. "Can I say this any more directly? This is not the right thing for North Dakota."

• Wahpeton Finance Director Darcie Huwe
• Williams Count Auditor Beth Innis
• North Dakota Public Instruction Superintendent Wayne Sanstead
• Rep. Charles Damschen
• Fargo Moorhead West Fargo Chamber of Commerce
• Keep It Local North Dakota
• Former North Dakota Governor Ed Schafer
• Sen. Terry Wanzek
• North Dakota League of Cities
• Association of Counties
• AFL-CIO, Farmers Union
• Association of Realtors
• Petroleum Council
• Bankers Association

Arguments

• In response to the proposed measure Wahpeton Finance Director Darcie Huwe said, "This will be monumental. Property tax is one way for local governments to kind of control their destiny, with their ability to raise bulk revenue to provide local services. And if we lose that ability or diminish that ability to raise local revenue that provides local services, I think you end up with a disconnect between funding and priorities." If property taxes were eliminated as a source of revenue, local governments would have to depend on the state to replace the source, said Huwe. "In what form and how would it come and would it be the same amount and what would control how much that amount would be... a lot of big unknowns that aren't necessarily defined in the proposed legislation," she said.

• According to Williams Count Auditor Beth Innis eliminating the property tax would have had a serious impact on citizens and could have caused an increase in sales taxes or income taxes in order to compensate for the lost revenue. In particular, Innis said she believed the elimination of property taxes would have impacted people with low or fixed incomes.

• North Dakota Public Instruction Superintendent Wayne Sanstead said, "It has ramifications that could be severe for certainly, I'd say, school districts, but all political subdivisions." Sanstead argues that the legislature has taken strides to reduce property taxes. "We're down around 30 percent now. It's a lot less than it was when I came into this office, and I'm happy about that, but the first is, to eliminate totally, that`s a whole different kettle of fish," said Sanstead.

• Rep. Charles Damschen said that he is concerned that voters may assume that the proposed amendment means a tax cut. Damschen argues that it may in fact force state taxes upward. "This really is not going to be a net tax cut, and if people believe that, or are told that, it’s really misleading. That revenue isn’t going to just appear (elsewhere) when we abolish property tax," he said.

• Fargo Moorhead West Fargo Chamber of Commerce President and CEO Craig Whitney said, "To eliminate an entire source of revenue for nearly 3,000 political subdivisions without an approved methodology to replace that funding is dangerous. Instead, we need to explore alternative, sustainable revenue sources in order to lower the tax burden on property owners."

• According to Keep it Local North Dakota, arguments that abolishing property tax would lead to an increase in local control are false. The group contends that it could lead to a full time legislature because the burden of funding local governments would fall to the state.

• Brian Paulson, assistant fire chief for the Jamestown Rural Fire Department, presented concerns that volunteer organizations, like local fire departments, would have to lobby the Legislature for funding.

• Michael Leachman, an analyst for the Center on Budget and Policy Priorities in Washington, D.C., argues that eliminating property taxes will increase the state's dependency on a "fickle money source," in reference to the oil revenues the state collects and the increase in these revenues amendment supporters hope to create. Speaking to the Associated Press about a study done by the center, Leachman said, "That would leave the education of your state's children, your future workforce, vulnerable to a highly volatile industry."

Polls

See also: Polls, 2012 ballot measures

• A May 3-8, 2012 poll by Forum Communications revealed that 74% would vote against the amendment, while 26% would vote for it. A total of 500 likely primary voters were polled. The margin of error was +/-4.3%.

Date of Poll	Pollster	In favor	Opposed	Undecided	Number polled
May 3 - May 8	Forum Communications	26%	74%	0%	500

2012 measure lawsuits
By state
Arizona • Colorado • Florida • Maryland Michigan • Massachusetts • Minnesota Missouri • Montana • Nevada North Dakota • Ohio • Oklahoma Oregon • Rhode Island
By lawsuit type
Ballot text Campaign contributions Constitutionality Motivation of sponsors Petitioner residency Post-certification removal Single-subject rule Signature challenges Initiative process

Lawsuit

Empower the Taxpayer, et al. v. Cory Fong, et al.

On Wednesday, February 15, 2012, Empower the Taxpayer and Charlene Nelson, chairwoman of the initiative campaign, filed a lawsuit against Tax Commissioner Cory Fong and several other top public officials. The lawsuit claims that these officials are using public money and resources to campaign against Measure 2 and, thereby, violating North Dakota laws that prevent public resources being used for political activity. Robert Hale, a member of Empower the Taxpayer, said, "Elected officials, government entities and organizations funded with taxpayer dollars are actively and intentionally engaged in lies, misrepresentations, deceptions, mischaracterization and fear-mongering." Fong responded to the allegations saying, "I think I was elected as tax commissioner ... to have comments and analysis of important measures that affect our tax system. This measure obviously impacts our overall tax system."

On February 21 District Judge Bruce Romanick denied the plaintiffs' request for a court order telling public officials to stop speaking against the measure. Judge Romanick said the lawsuit provided no sworn statements that back up its allegations, statements which are needed to secure the court order requested.

Judge Romanick set an April 3 hearing for the lawsuit during the week of March 20, 2012.

The lawsuit was thrown out by Judge Romanick on April 12. The decision was quickly appealed to the North Dakota Supreme Court.

• Romanick's ruling can be found here.

Path to the ballot

See also: North Dakota signature requirements

The petition is valid for one year and may still appear on the 2012 ballot. The petition is valid until March 29, 2011. According to new census numbers, the measure now requires a minimum of 26,904 valid signatures in order to qualify for the 2012 ballot.

According to reports, supporters of the proposed measure submitted an estimated 27,800 signatures. Secretary of State Al Jaeger has until April 29 to verify and validate the signatures.

On April 29 Jaeger reported that the measure had more than 28,000 valid signatures thus qualifying the measure for the statewide ballot.

2010 effort

Amendment supporters were required to collect a minimum of 25,688 valid signatures by August 4, 2010 in order to place the measure on the 2010 ballot. However, if valid signatures were submitted after the August 4th deadline, the measure would have been placed on the June 2012 statewide ballot. According to reports, supporters failed to file the required signatures by petition deadline day on August 4, thus failing to qualify for the 2010 ballot.

Timeline

The following is a timeline of events surrounding the measure:

Event	Date	Developments
Filing	Mar 2010	Measure was proposed by Empower the Taxpayer and approved for circulation by the secretary of state.
Signatures	Apr. 29, 2011	North Dakota Secretary of State Al Jaeger confirmed that supporters collected sufficient signatures.

See also

By Eric Veram Ballot measure writer

Email • Submit a link

• 2012 ballot measures
• North Dakota 2012 ballot measures

Articles

• North Dakota property tax initiative qualifies for June 2012 ballot
• Petition signatures submitted for North Dakota property tax initiative
• North Dakota man proposes eliminating property taxes for 2010 ballot

External links

• Initiative text
• Initiative timeline

Additional reading

• The New American,"North Dakota Homeschool Mom Choreographs Ending Property Taxes," January 12, 2012
• KFYR-TV,"School District & Governor Raises Questions about Measure 2," November 16, 2011
• Associated Press,"Proposal to abolish ND property taxes stirs debate," October 18, 2011
• Associated Press,"Lawmakers to study ND measure that would abolish property taxes," May 10, 2011
• KFYR-TV,"ND Considers Abolishing Property Taxes," July 22, 2010
• The Bismark Tribune,"Petitions seek to put six measures on ballot," April 1, 2010
• Williston Herald,"Proposal would abolish property taxes," March 23, 2010
• Grand Forks Herald "Leon Mallberg, Dickinson, N.D., letter: To reverse Measure 2, pass a new amendment," April 25, 2012

Editorials

• The Daily Caller,"North Dakotans hope to right property-tax wrong," December 13, 2011
• The Dickinson Press,"Replacing property tax money is hard," May 15, 2011
• The Bismark Tribune,"Property taxes pay for services to roads, streets, schools; may be the best way," April 22, 2010
• Jamestown Sun "Readers say they’ll vote to keep property taxes," May 9, 2012