Bismarck, N.D. — North Dakota counties are seeking assistance from the state legislature as some struggle to develop their annual budgets following property tax breaks given to property owners. The Property Tax Reform and Relief Committee met Tuesday morning to receive an update on current property tax relief programs and their impact.
The North Dakota Association of Counties presented to the committee, detailing the challenges counties face. The association noted that counties are currently in the process of developing their budgets for the upcoming fiscal year. A significant hurdle in this process is a state-imposed cap that restricts annual property tax increases for counties to a maximum of three percent per year. This limitation, combined with the earlier property tax relief measures, is creating budgetary strain for some county governments.
Donnell Preskey, who works for the North Dakota Association of Counties, highlighted the extent of the issue in certain areas. Preskey stated that a common question posed to county auditors is what percentage of tax bills are effectively "zeroed out" due to the Property Tax Relief Credit (PRC). According to Preskey, this figure typically ranges between 60 to 70 percent. Preskey further elaborated that this percentage is considerably higher in rural areas of the state, where property evaluations and the overall property tax bills tend to be smaller. The effect of these "zeroed out" bills directly reduces the revenue available to counties, complicating their ability to fund local services and operations within the three percent increase cap.
Beyond the immediate budgetary concerns, the Property Tax Reform and Relief Committee also engaged in discussions regarding the state's Legacy Earnings Fund. Committee members explored how the earnings generated from this fund could potentially be utilized to provide future support for property tax relief initiatives. This long-term perspective aims to address the ongoing balance between providing tax breaks to property owners and ensuring counties have sufficient resources to operate.
The work of the Property Tax Reform and Relief Committee is set to continue. Its final report will be forwarded to the Legislative Management Committee for further review and consideration. Lawmakers are expected to discuss the committee's findings and recommendations more extensively during the next legislative session, which is scheduled to commence in January. This legislative review will be crucial for determining potential solutions and adjustments to property tax policies that impact local governments across North Dakota.
