As reported by Forum News Service, House Bill 1446 would use the proceeds from the Legacy Fund to raise property tax credits for homeowners in North Dakota and then reimburse the counties for the lost income. In the initial stages, the plan would likely not cover full property taxes for North Dakotans. However, FNS reports that the plan would give eligible applicants a substantial discount.
We know the response – elation, joy, joy – this potential gust of wind will evoke among the masses, and perhaps that is the intent. It’s a bad idea, however, that doesn’t fit the Legacy Fund’s intended goal, which continues to grow (approaching $ 8 billion) as it deducts a percentage of oil-related taxes into a savings account. It has become a political cookie jar that many lawmakers hope to get into.
The aim of the Legacy Fund is twofold. First, it should be available as a source of income when the oil industry disappears, which will eventually happen. Second, it should be used to diversify the state’s economy so that we do not become so dependent on oil, a commodity whose falls and rises can destroy the state’s finances.
These goals should not completely limit the use of dollars from the Fund or its annual revenue, provided that these goals remain the basis for spending proposals. For example, a proposal to use its revenues on infrastructure loans is good, as a healthy infrastructure system can grow the state’s economy. The same goes for the proposal to use part of the proceeds to build the Theodore Roosevelt Library in the Badlands to boost tourism, another important industry in North Dakota.
Reducing or eliminating property taxes would be a long-term commitment that would stifle the Legacy Fund’s growth while increasing our reliance on oil.
Another question: is it completely fair to use the fund to pay property taxes? After all, not every North Dakotan owns property. Do rents decrease accordingly when property taxes disappear?
Governor Doug Burgum has repeatedly voiced his own beliefs about spending Legacy Fund dollars. He believes that the criteria should be that any Legacy Fund spending proposal:
Have regional, state and / or national implications.
Multiply yourself through partnerships, matching funds or loan funds.
Diversify our economy and attract our workforce.
Make a lasting impact beyond our current generation.
We believe the Legacy Fund’s intention was clear from the start – to reduce North Dakota’s economic reliance on oil. Giving dollars directly to people does not meet these criteria. The proposal also does not adequately meet the criteria of Governor Burgum’s Legacy Fund.
Hopefully this property tax plan – a bright, shiny object that is sure to grab the attention of many – will be quickly defeated so that the Legacy Fund can continue to grow and be used according to its true intent.