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Reality Check: North Dakota’s Property Tax Vote

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(credit: CBS) Pat Kessler
Pat Kessler knows Minnesota politics. He's been on the beat long...
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ST. PAUL (WCCO) – Voters in North Dakota get a chance Tuesday to do something no state has ever done before: Not just lower property taxes, but abolish them. It’s a bold move, but critics say it will throw the state into chaos.

Here’s how it came to this.

The oil boom made North Dakota rich and famous. In fact, North Dakota now ranks No. 2 in the United States for oil production, behind Alaska.

In turn, property values soared at the same time a Ron Paul tax revolution began.

In a web video posted by the group pushing for the vote, Empower the Taxpayer, presidential candidate Ron Paul urges passage.

“If North Dakota can do this,” he said, “this would be fantastic.”

That’s NOT THE WHOLE STORY.

It’s not like North Dakota is overtaxed. It ranks No. 29 in the US for property taxes at $1,165 per capita, compared to Minnesota’s No. 20 at $1,346 per capita.

North Dakota also has the lowest unemployment rate in the US at 3 percent. That compares to Minnesota’s 5.6 percent unemployment rate, which is ninth in the nation.

This is about property rights.

“When there’s a property tax, you don’t truly own your property. You pay rent to the government every year,” said Brett Narloch, of the North Dakota Policy Council, a self-described “liberty based think tank.”

“How can we say that? If you don’t pay your taxes they’re going to come and take it,” added Narloch.

The Empower The Taxpayer revolt in the Peace Garden State is the god-child of California’s 1970s Proposition 13.

It was also a very controversial vote at the time, to lower California’s skyrocketing property taxes.

The North Dakota vote goes even further: Completely eliminating property taxes.

However, without property taxes, there’s a $812 million dollar hole in the budget. It’s something even oil revenues cannot plug.

What you NEED TO KNOW is:

North Dakota law requires much of the oil revenues to go into a trust fund. The rest is split between schools, roads, water projects –and property tax reductions.

North Dakota is one of the few states in recent years to actually provide income and property tax relief:
More than $1 billion in the last 5 years.

Leading up to the vote, independent polls show 70 percent of North Dakotans oppose the ballot measure.
 
Here are some of the sources for Reality Check:
ND Group Promoting Property Tax Measure
Ballot Measure language
How Oil Money is Distributed
State and Local Property Tax Rankings
Unemployment Rankings by State
Proposition 13
ND Public Opinion Poll

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