Property tax reform leads long list of legislative to-dos

The first third of the biennial 69th Legislative Assembly session convening Jan. 7 in Bismarck is likely to see property tax reform as the main challenge for legislators, according to leaders from across the political spectrum. 

Most don’t expect the more than 50 anticipated property tax reform measures to engulf the proceedings, but the large number of bills will complicate matters during committee meetings, particularly for newer legislators just getting their feet wet. 

“We will settle on the correct policy as soon as we achieve a consensus,” on the raft of potential property tax reform measures, said Senate Majority Leader David Hogue, R-Minot.

“I think there's strong consensus on the idea that we need to cap property tax revenue spending at the local level, while at the same time providing some safety valve for extraordinary expenditures that the people vote for,” Hogue said. 

Property tax reform 

Hogue said he thinks there is “good consensus” on expanding the primary property tax credit as the means to provide tax relief to residents across the state, as well as simplifying the Homestead Property Tax credit which targets further relief for those over 65 years of age to make it more effective. 

House Majority Leader Mike Lefor, R-Dickinson, said property tax reform that goes beyond just providing relief will be the top priority. 

This could include looking more deeply at the tax assessment and valuation process across the state to ensure it is consistent, fair and transparent. It could also include helping counties better manage their spending processes, Lefor said. 

Another possibility could include a range of property tax percentage caps as well as potentially including life estates and trusts in what’s covered under property tax relief. 

“There’s a lot of ideas floating around out there that will be given serious consideration,” Lefor said.  

Sen. Hogue said workforce development is another top priority of his, particularly related to childcare and whether attraction campaigns like “Find the Good Life” are effective. 

When it comes to the $65 million expenditure on childcare during the last session, the legislature really needs to “roll up its sleeves and investigate how effective that was,” Hogue said.

“The purpose of the spending was to make childcare more affordable, with the supposition that if it became more affordable, more people would enter the workforce,” he said. “And we need to see evidence of that before we make that program continue.” 

Rep. Lefor mentioned reforms of state cash management and getting a school choice bill passed as other top priorities. 

“Tax reform is at the top,” Lefor said. “As far as sailing through, I’m always going to be cautious because I want things to be vetted, I want things to be questioned, I want there to be debate, so that we can get to the best possible product.” 

House Minority leader Zac Ista, D-Grand Forks, said he believes this session is a “real opportunity for the assembly to shine.” 

He expects a robust process. 

“I think we all have the end goal in mind of being responsive to people who are concerned about the tax bill being too high, too unpredictable,” Ista said. 

The key question for him is how to reform without harming local services funded by local property tax collections. 

“People want safe roads and bridges. They want robust public safety and emergency response. They want good K-12 schools in their neighborhoods,” he said. 

Increasing legislative complexity 

Several legislators said the sheer number of bills complicates the process and potentially limits the quantity of time spent on the most important issues. 

For Senate Minority Leader Kathy Hogan, D-Fargo, particularly concerning are those pre-packaged bills from out-of-state special interests, many of which touch on marginal “culture war” topics. She sees the likelihood of similar bills surfacing this session.

“Based on the numbers of bills that have been drafted, I think they're going to be all over the place,” Hogan said, contributing to the complexity of handling them since they may not fit North Dakota’s century code language or protocols.

“I think my big concern is we're going to get clogged in committee hearings and all of those procedural things,” she said.

Hogan and Ista also said childcare, housing, behavioral health, workforce and school meals are priorities for them. 

A recent North Dakota Poll, conducted by the North Dakota News Cooperative, showed broad support for free school meals, spending on childcare, and state support for affordable housing. 

Sen. Judy Lee, R-West Fargo, chair of the Senate Human Services Committee, said the number of bills is also concerning to her.

All bills go through a committee hearing, a committee vote and then a floor vote before crossing over to the other chamber of the legislature. That all must happen before crossover, which occurs this session on Feb. 28. 

“When the legislators have been approached about collaborating with others who may be dealing with a same, general topic, there has been a reluctance of legislators to do that,” Lee said. “I'm disappointed in that.” 

Besides property tax reform, Lee said, funding for a new state hospital is high on her list, as is monitoring the effectiveness of the new Office of Legal Immigration and looking at ways to improve it. Reviewing the impact of previous housing and childcare initiatives to make them more effective is also a priority, she said. 

For Sen. Tim Mathern, D-Fargo, the issue isn’t necessarily the number of bills, but the fact legislators only meet once every two years. For him the solution is an annual legislative session. 

“Who else as a well-run company or an organization shows up every two years?” Mathern asked. “We need to have an annual session. We need to have legislators that are even more invested in the legislative process.” 

Mathern said there should be less concern about the number of bills and more welcoming of ideas and debate. 

“This is really our citizens asking us to do these things and it is our job to go through and decide what works and what doesn’t work, and to do our job we need to be there annually and upgrade our legislative process,” he said. 

Mathern lists property tax reform as the top priority for the session, but said he hopes it isn’t rushed through and will be properly debated for the full period. Addressing behavioral health issues, supporting the childcare workforce, addressing housing gaps, as well as workforce and immigration are also top of mind. 

Business innovation and workforce attraction 

As House chair of the Industry, Business and Labor Committee, Rep. Jonathan Warrey, R-Casselton, said continuing to build upon investments made into education and into Career & Technical Education Centers (CTEs) is important, as is further streamlining the acceptance of licenses and certifications from professionals moving to the state. 

“It’s just red tape that hinders somebody, and it could even block somebody from moving here, whether it’s a military transfer or a promotion to our state,” Warrey said, adding it can take several months in some cases to get qualifications recognized. “Okay, what if it was just six days? What can we do, policywise, to help foster that?” 

Besides property tax reform, said Rep. Mike Nathe, R-Bismarck, workforce initiatives, childcare and housing are top priorities. 

“Housing has become a big obstacle for some companies to come in,” Nathe said.” I’m hearing a lot more concern and emphasis about how we’ve got to help these communities develop housing, more affordable housing and get ahead of it.” 

Nathe serves as house chair of the Education and Environment Committee which will be tasked with sorting through school choice bills as well. 

Nathe said he thinks the makeup of this legislature is conducive to getting a school choice bill passed. He said the bill will likely be similar to what was passed in last session and vetoed by then Gov. Doug Burgum, but is likely to have an education savings account as its basis. 

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