North Dakota Property Tax Amendment, Measure 2 (June 2012)
|Property Tax Amendment|
|Constitution:||North Dakota Constitution|
|Referred by:||Empower the Taxpayer Committee|
- 1 Election results
- 2 Text of measure
- 3 Support
- 4 Opposition
- 5 Media editorial positions
- 6 Polls
- 7 Lawsuit
- 8 Path to the ballot
- 9 Timeline
- 10 See also
- 11 External links
- 12 Additional reading
- 13 References
Measure 2 proposed 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 required the legislature to replace local governments' property tax income with state tax revenue. A similar proposal was rejected in 2009 by the North Dakota Legislature.
The following are official election results:
426 of 426 precincts reporting
Results via the North Dakota Board of Elections.
Text of measure
The measure as appeared on the ballot read:
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.
- "The fiscal note prepared by the Tax Department states the measure will repeal ad valorem property taxes effective January 1, 2012. The amount of property taxes that would be eliminated upon successful passage of the measure would total $812,225,000 for 2012. The estimated fiscal impact assumes the effective date of the measure would initially impact and repeal 2012 property taxes that would be due and payable in 2013. The estimated fiscal impact reflects only one year of the 2011-13 biennium. The impact for subsequent bienniums would reflect a two-year period. Based on the historical property tax growth of 7.7 percent, per year the estimated fiscal impact of the measure for the 2013-15 biennium would be $1.8 billion."
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.
- 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 argued 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, used 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 stated that the measure would create a fairer business climate, thus helping to diversify the state economy.
The following information was obtained from North Dakota Secretary of State website.
|Empower The Taxpayer||$21,760.41|
Opponents argued that it is dangerous to "eliminate an entire source of revenue" and that the proposal is misleading. The proposal, they argued, may appear like a tax cut but may instead force other state taxes upward in order to compensate.
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
- 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 a serious impact on citizens and could cause an increase in sales taxes or income taxes in order to compensate for the lost revenue. In particular, Innis said she believes the elimination of property taxes would impact 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 making the claim that abolishing property tax would lead to an increase in local control are false. The group contended 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., argued 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."
The following information was obtained from North Dakota Secretary of State website.
|Keep It Local North Dakota||$579,140|
Media editorial positions
- The Minot Daily News argued against the measure in a May 19 editorial saying, "We're all for lowering property taxes, but Measure 2 is not the way to accomplish that goal. It's simply a bad idea."
- 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%.
- An early-June 2012 poll by Mason-Dixon revealed that 70% would vote against the amendment, 21% would vote for it, and 9% were undecided. A total of 404 likely primary voters were polled. The margin of error was +/-5%.
|Date of Poll||Pollster||In favor||Opposed||Undecided||Number polled|
|May 3 - May 8||Forum Communications||26%||74%||0%||500|
|2012 measure lawsuits|
| Arizona • Arkansas • Colorado • Florida • Maryland |
Michigan • Massachusetts • Minnesota
Missouri • Montana • Nevada
North Dakota • Ohio • Oklahoma
Oregon • Rhode Island
|By lawsuit type|
|Ballot text |
Motivation of sponsors
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.
The state supreme court took up the case and heard arguments from lawyers during the week of June 4. The appeal will have little effect on the election however, since the court will not deliver its ruling until after June 12.
- Romanick's ruling can be found here.
Path to the ballot
- See also: North Dakota signature requirements
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.
Following the failure in 2010 to collect enough signatures the petition remained valid until March 29, 2011, thus allowing for supporters to attempt to place on the 2012 ballot. According to new census numbers, the minimum number of signatures needed to qualify increased to 26,904.
On April 29 Jaeger reported that the measure had more than 28,000 valid signatures thus qualifying the measure for the statewide ballot.
The following is a timeline of events surrounding the measure:
|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.|
- 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
- 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
- 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
- KFYRTV,"ND Group Pushes to Abolish Property Taxes," March 17, 2010
- KXNet,"Tax petition," March 17, 2010
- Associated Press,"Measure would abolish N.D. property taxes in 2012," March 17, 2010
- Associated Press,"Measure to abolish ND property taxes approved," March 30, 2010
- Associated Press,"Measure to abolish N.D. property taxes on ballot," April 29, 2011
- Measure 2 text, retrieved from Secretary of State, April 25, 2012
- North Dakota Secretary of State, "Fiscal Impact of Measures 2 and 3", Retrieved June 8, 2012
- Minot Daily News,"To tax or not to tax," November 27, 2009
- Bismarck Tribune "Republicans hold Measure 2 discussion," May 16, 2012
- Associated Press,"ND property tax abolition backers challenged," June 22, 2011
- The Jamestown Sun "Measure 2 opinions: Measure’s opponents worried by its details," May 9, 2012
- Grand Forks Herald "Brett Narloch, Bismark, column: Measure 2 would fuel tremendous growth," April 24, 2012
- Bismark Tribune "Group outlines opposition to Measure 2," February 1, 2012
- WDAY "Former ND Governor Schafer speaks out against Measure 2," April 16, 2012
- The Jamestown Sun "Weigh in on 2: Lawmakers, officials say Measure 2 unworkable," May 15, 2012
- WDAY "Measure 2 opponents say bill is a big risk for North Dakota," May 17, 2012
- Wahpeton Daily News,"Measure could reduce city funding, services," May 19, 2010
- Williston Herald,"Questions linger on proposal to abolish property taxes," May 24, 2010
- KFYRTV,"Lawmakers Debate Abolishing Property Taxes," July 26, 2011
- The Jamestown Sun,"Assessments could replace property taxes in N.D.," August 16, 2011
- ValleyNewsLive.com,"The Chamber opposes ND property tax elimination," September 22, 2011
- Bismarck Tribune "Measure 2 draws nation’s attention," April 28, 2012
- Associated Press "Study calls ND property tax abolition 'risky'," May 16, 2012
- Minot Daily News "Measure 2 should be rejected," May 19, 2012
- Forum Communications Co. "North Dakotans lean heavily 'no' on Measure 2," May 14, 2012
- KFYR-TV "Primary Election Poll: Measures 2 and 4," June 11, 2012
- Associated Press "Lawsuit: ND officials lying about tax measure," February 16, 2012
- Associated Press "Judge won't muzzle North Dakota property tax measure foes," February 21, 2012
- Businessweek, "Hearing planned on ND property tax lawsuit," March 23, 2012
- Associated Press "Lawsuit on N.D. property tax measure to be appealed," April 14, 2012
- Dickinson Press "Supreme Court hears appeal of tax measure suit," June 6,2012
- KFYR-TV,"Green Light Given for Property Tax Petition," March 29, 2010
- Associated Press,"Ballot measure to abolish ND property taxes still seeking last-minute signatures," March 28, 2011
- Associated Press,"Amendment would abolish property taxes," March 26, 2011
- Assoctiated Press,"Property Tax Amendment Goes to ND Secretary of State," March 28, 2011