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North Dakota voters hit the polls yesterday and overwhelmingly (76 percent) said No to Measure 2, a proposal to eliminate — and constitutionally ban into perpetuity — their property taxes.
Among those against the measure, the state’s tax commissioner opposed it on the grounds it was fiscally unsustainable, and the state’s League of Cities opposed it for undermining local control over revenues and budgets.
Spearheading the measure was a group called Empower the Taxpayer, ET for short. Proponents regularly cited North Dakota’s recent energy boom and the surplus of oil revenue it has created as one reason the state could afford to get rid of such a reliable revenue source – which constitutes roughly a quarter of all state revenues. We note, however, that ET’s director said, “We started this movement before the oil boom…. This isn’t about being flush with oil money.”
It is true that, thanks in large part to the state’s energy boom, North Dakota was the only state to weather the economic recession without taking a hit to its revenues. But the oil and gas making the state rich today will run out one day, and banning property taxes would have undoubtedly made North Dakota more vulnerable when that happens, leaving the state unable to fund even the most basic level of services in future “bust” years. In the end, voters recognized it was unwise to permanently eliminate a relatively stable revenue source in favor of a highly volatile and unsustainable one.
The North Dakota property tax repeal failure is the latest in a line of unsuccessful attempts this year to repeal, reduce or phase out major state taxes. Its advocates have vowed to fight another day but for now, it goes to show that just as Americans want federal taxes to support government services, they also value strong schools, safe communities, accessible health care, and well maintained roads over tax cuts in the states they call home.
Photo of North Dakota Oil Field via Porchlife Creative Commons Attribution License 2.0