North Dakota House Bill HCR3024

North Dakota 2023-2024 Regular Session

• Introduced: 2/21/23
• Refer: 2/21/23
• Report DNP: 3/10/23

Caption

Prohibiting the levy of property tax; and to provide an effective date.

Impact

If enacted, HCR3024 will significantly alter how local governments finance operations, transitioning the financial burden from property taxes to sales taxes. This change may lead to fluctuating revenue for local entities, as sales tax revenues can be influenced by economic conditions more so than stable property values. The bill includes provisions that allow the legislative assembly to convene to establish the details concerning how the replacement payments will be managed and maintained, emphasizing flexibility and adaptability in implementation.

Summary

House Concurrent Resolution 3024 (HCR3024) aims to prohibit the levy of property tax in the state and proposes an alternative method to fund local governmental needs through increased sales tax. Specifically, the resolution seeks to ensure that political subdivisions, which often rely on property tax revenue, are not adversely affected by this prohibition. The proposed mechanism includes establishing a property tax revenue replacement fund to facilitate annual payments to these subdivisions, funded through an increased sales tax rate deemed necessary by the legislative assembly.

Sentiment

Discussions surrounding HCR3024 reveal a mixed sentiment among legislators. Supporters view the bill as a progressive move towards a more equitable tax structure, suggesting that over-reliance on property taxes often negatively impacts lower-income and working-class residents. Conversely, opponents argue that the measure could destabilize funding for local governments, potentially leading to reduced public services and increased economic strain on communities that depend on property taxes for essential funding.

Contention

One of the notable points of contention lies in the reliance on a sales tax increase to replace lost property tax revenues. Critics question the fairness of shifting tax burdens to consumption rather than property ownership, fearing this could disproportionately affect low-income residents who spend a higher percentage of their incomes on essential goods. Furthermore, there are concerns regarding the adequacy of sales tax revenue to meet local governmental needs, particularly in times of economic downturn.