Religion and taxes: Lawmakers eye ND measuresLawmakers on Tuesday backed the state Tax Department’s estimate that abolishing North Dakota property taxes would oblige them to set aside at least $812 million in replacement money for local governments each year.
By: Dale Wetzel, Associated Press
BISMARCK — Lawmakers on Tuesday backed the state Tax Department’s estimate that abolishing North Dakota property taxes would oblige them to set aside at least $812 million in replacement money for local governments each year.
The Legislature’s Legislative Management Committee, which includes the Legislature’s Republican and Democratic floor leaders, accepted the department’s assessment as part of a review of two ballot measures and their potential budget consequences for North Dakota state government.
One of the proposals, Measure 2, would change the North Dakota Constitution to abolish property taxes and make the change retroactive to Jan. 1, 2012.
Another constitutional amendment would make it more difficult for state or local governments in North Dakota to regulate religious behavior. Pam Sharp, director of the state Office of Management and Budget, said the agency could not quantify any budget impact from that proposal.
North Dakotans will decide the fate of both proposals in the June 12 primary election.
There are four measures on the ballot. The other two would make it easier for North Dakota lawmakers to qualify for appointment to state government jobs, and decide whether the University of North Dakota must continue using its Fighting Sioux sports nickname.
A supporter of the “religious freedom” amendment, Tom Freier, director of the North Dakota Family Alliance, said he did not believe it would affect state government finances. It is intended to strengthen the rights of North Dakotans to exercise their religious beliefs, he said.
The U.S. Supreme Court weakened those rights in a 1990 decision that concluded state law could regulate religious practices as long as the law did not discriminate against religion, Freier said. The amendment would require government officials to offer compelling reasons for regulating religious practices, which is a tougher legal standard to meet, Freier said.
The property tax amendment abolishes the tax in almost all circumstances. One exception is if property tax revenues have been promised to pay off a government bond issue, attorneys said. Once the debt is retired, the property tax would vanish as well.
The amendment says the Legislature must use state tax revenues to “fully and properly fund the legally imposed obligations of the counties, cities, township and other political subdivisions.”
The $812 million would be a baseline for providing replacement money to local governments, said Rep. Al Carlson, R-Fargo, the House majority leader and chairman of the Legislative Management Committee.
Lawmakers would have to decide whether to increase that sum in the future, Carlson said.
“You’d be giving them the same amount of money that they were getting, and (the amendment) says they have the discretion to spend that money as they ... see fit,” Carlson said. “You could wash your hands of this whole thing if you read it in its simplest form and say, ‘I’m going to give you the same amount of money.’”
North Dakota’s current two-year general fund budget is about $4 billion, and lawmakers say they doubt they could provide replacement money for local governments without raising some state taxes.
The North Dakota House’s speaker, Rep. David “Skip” Drovdal, R-Arnegard, said the definitions of “full and proper” funding and the “legally imposed obligations” of local governments would be open to interpretation.
“Those are two things that the Legislature is going to have to determine,” Drovdal said.
Copyright 2012 The Associated Press.