BISMARCK-A past legislative debate over property tax policy was renewed Wednesday when lawmakers heard a bill that would place an annual cap on any increase in property tax levies.

Rep. Ben Koppelman, R-West Fargo, outlined House Bill 1276 before the House Finance and Taxation Committee. It would cap the increase of property tax levies at 3 percent, with increases beyond that requiring a vote of local residents.

Koppelman said HB1276 provides for a series of exemptions.

"This bill specifically accounts for tax credits and abatements coming on or off of properties as well as improvements of property and taxes to repay bonded indebtedness by excluding them from the limitations," Koppelman said.

The bill also would not apply to the one-mill levy for the State Hospital in Jamestown.

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Koppelman said, while on the campaign trail last year, constituents consistently were calling for a solution to sharp spikes in annual property tax levies beyond the rate of inflation and wage increases. He called the existing system broken.

"This is unsustainable, and our citizens are begging us to reform this tax," Koppelman said.

The bill drew opposition from many city and county officials, who said it would remove the flexibility to budget year to year if there are wide fluctuations based on emergencies. School officials testified that a cap would impact what they can receive in the state's foundation aid payments.

Fargo City Commissioner Dave Piepkorn emphasized the flexibility in annual budgeting concerns.

"We are all subject to financial uncertainty that arises from changing economic conditions, natural disasters or other unforeseen events," Piepkorn said. "This is especially important during a time when we are experiencing a major decline in our state shared resources."

Stutsman County Auditor Casey Bradley agreed and questioned the effectiveness of using the ballot box for tax increases beyond a capped amount.

"It costs tens of thousands of dollars to ask these questions," Bradley said.

Jeff Fastnacht, superintendent for Ellendale Public Schools and president of the North Dakota Association of School Administrators, also had concerns with HB1276.

"This bill would dramatically restrict the authority of locally elected school board members to properly manage their districts' finances even within those already stringent restraints," Fastnacht said.

Jerry Coleman, Director of School Finance and Organization for the North Dakota Department of Public Instruction, said a change to the funding formula would be needed if HB1276 passed.