Reform The Property Tax? Yes Please. More State Buy Downs? No Thanks. – Say Anything (2024)
Since about 2007, the approach to addressing North Dakota’s property tax problem under Governors John Hoeven and now Jack Dalrymple has been for the state to buy them down. First with an income tax payment, then with money sent directly to local governments in exchange for locals lowering mill levies.
Those buy downs have created some daylight for North Dakota property owners on their tax bills. Because the state has taken over so much local spending obligation, local property taxes have come down. Of course, the question is will they stay down, and what impact will all this additional obligation to spend at the local level have on state taxes?
The fundamental problem with this sort of property tax relief is that it’s no relief at all. It’s a shift in spending burden, from local budgets to the state budget. That’s been an easy shift to make as the state’s coffers are flush with oil boom driven-revenues, but what happens when booming revenues aren’t the norm any more?
That’s a question many, including lawmakers I’ve spoken to, are afraid to answer.
But all that aside, there are some hints of meaningful property tax reforms coming for this legislative session. These reforms won’t necessarily have a direct impact on tax levels or spending, but they may make the property tax process a bit easier to understand.
Via theBismarck Tribune, here’s a list of reforms currently being considered for submission as legislation in the next session by the Interim Taxation Committee chaired by Senator Dwight Cook:
Create a uniform property tax statement for statewide use.
Eliminate the requirement for printing tax increase notifications in newspapers and replace it with direct mail notifications.
Change use of calculating mills in tax code to a format using dollar amounts.
Reduce the number of classes of tax assessors in the state from four to one.
Specify that only elected officials can levy property taxes.
North Dakota Tax Commissioner Ryan Rauschenberger said the task force has reviewed all 186 property tax mill levies in state law. Prioritizing mill levies for elimination, consolidation or having the state take responsibility for funding is now underway.
“I would say as far as elimination goes (there’s) probably a couple dozen so far, but that’ll change,” Rauschenberger said.
Dozens more have been targeted for possible consolidation, he said.
Some legislators weren’t exactly pleased when Dalrymple announced this task force, and many are afraid that among the mill levies consolidations will be a state take over of county social service spending.
“Word is the Gov’s yet-to-be-named committee already has a ‘fix’ in mind: taking over county social services, or at least the child-related portions,” a legislator told me in an email back in December when the task force was announced. “This supposedly would ‘reduce’ taxes by approximately 20+ mills. I’m hearing this from some colleagues who recently met with him.”
The legislator wasn’t keen on the idea. “I think it’s a horrible idea which will only expand the Department of Human Services.”
“The thinking is he’s doing this to have state take over social services,” another legislator told me at the time. He said such a move would be “very expensive with no end in sight” but that “counties are begging for this.”
I think these objections to the state taking over social services speaks to the heart of the problem with property tax relief to date. The state taking over local spending isnot tax relief.
If we’re going to have a property tax – and voters decided in June of 2012 that we’re going to have one when they voted down a ballot measure to eliminate it – it should be more transparent and less complicated. So many of the reforms above sound like a move in the right direction.
But the state taking over more local spending? That’s a mistake. The state has done too much of that already. Hiding local spending problems in state budget surpluses is not a long-term solution.
Tags: dwight cook, jack dalrymple, John Hoeven, property tax
The Problem. Property tax is the worst, most immoral method of taxation levied on Texans. No homeowner truly owns their property when that ownership is contingent on the payment of a tax. Property valuations are rising at a rapid pace and increasing the overall tax burden on homeowners.
This tax relief allows homeowners to pay the property taxes on 105 percent of the preceding year's appraised value of their homestead, plus the taxes on any new improvements to the homestead. The remaining taxes are postponed, but not cancelled, with interest accruing at 8 percent per year.
You may use Comptroller Form 50-132, Property Appraisal - Notice of Protest, to file your written request for an ARB hearing. Prior to your hearing, you may request a copy of the evidence the appraisal district plans to introduce at the hearing to establish any matter at issue.
You may be aware that seniors can apply for an exemption from Texas property taxes. This is true: when you reach the age of 65, you can file an affidavit with the chief appraiser in your district to exempt yourself from the collection of taxes on your property.
One of your most important rights as a taxpayer is your right to protest to the appraisal review board (ARB). You may protest if you disagree with the appraisal district value or any of the appraisal district's actions concerning your property.
The Texas Constitution forbids personal income taxes. Instead of collecting income taxes, Texas relies on high sales and use taxes. When paired with local taxes, total sales taxes in some jurisdictions are as high as 8.25%.
New Jersey has the highest property tax rate at 2.47%, followed by Illinois, Connecticut, New Hampshire, and Vermont. There are 14 counties with an estimated median property tax above $10,000 across California, New York, New Jersey and Virginia.
It's also important to note that freezing property taxes at 65 does not mean that you stop paying property taxes altogether. In Texas, there is no age at which you stop paying property taxes.
To successfully protest your property tax appraisal, gather specific data such as your property's assessed and fair market value amount, comparable property values, recent sale prices, market trends, and property improvements or damages.
Appraisal of subject property/date of appraisal/reason for sale/appraisal. This type of information can be documented in a variety of ways. The best type of documents is usually estimates for repairs from contractors and photographs of physical problems. All documentation should be signed and attested.
A taxpayer must request a refund within 90 days if the overpayment is less than $1. If a collector discovers that a taxpayer mistakenly paid a tax because another person paid the identical tax amount on the same property, the collector must automatically refund the duplicate payment as soon as practicable.
Texas homestead owners over 65 or with a disability will see over $1,400 in savings. Senate Bill 3 (Bettencourt/Geren) law increases the Franchise Tax “no tax due” threshold to $2.47 million and removes burdensome filing requirements for those who do not owe tax.
If you are at least 65, unmarried, and receive $15,700 or more in nonexempt income in addition to your Social Security benefits, you typically need to file a federal income tax return (tax year 2023).
If you are unsatisfied with your appraised value or if errors exist in the property's appraisal records, you may file a Form 50-132, Notice of Protest with the ARB. In most cases, you have until May 15, or 30 days from the date the appraisal district notice is delivered — whichever date is later.
As a state without income tax, Texas relies heavily on property taxes. Rising home values result in rising tax payments later, and one way to save money is to protest the appraisal value with the county appraisal district.
Property tax exemptions are one of the most meaningful and simple ways to reduce property taxes. The Texas legislature has provided numerous property tax exemptions for Texas taxpayers. Exemptions for homestead, over 65 homestead, disabled homestead and disabled veteran are just the start.
Texas is a majority Republican state with Republicans controlling every statewide office. Texas Republicans have majorities in the State House and Senate, an entirely Republican Texas Supreme Court, control of both Senate seats in the US Congress.
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