North Dakota farm organizations mixed on property tax measure one week before election

On Election Day, North Dakota residents will vote on Measure 4, a ballot initiative that would eliminate the state’s ability to levy property tax on citizens. The measure has been met with a mixed reaction from farm owners and farm organizations. Multiple organizations expressed concerns that passing the measure would have more benefits for out-of-state landowners than North Dakota residents. 

North Dakota Farm Bureau

Daryl Lies, president of the North Dakota Farm Bureau, expressed clear support for the initiative in a statement on the NDFB website. 

“Last November, during the NDFB Annual Meeting, NDFB members passed a policy advocating for the elimination of the current property tax system. As a grassroots policy development organization, NDFB supports Measure 4, reflecting our members’ wishes.

“The freedom to own property is the foundation of our American Dream. We believe the passage of Measure 4 will enhance our freedom by removing valuation based taxation of our private property.

“NDFB is committed to assisting and guiding the legislature in the essential task of prioritizing funding to replace the resources allocated to municipalities, as specified in the measure,” Lies said.

North Dakota Farmers Union

The North Dakota Farmers’ Union, which compasses over 60,000 farm and ranch families, expressed its opposition to Measure 4 and said the measure would “disproportionately harm rural communities.”

“NDFU does not support Measure 4 and is encouraging members to vote no. Delegates at our state convention last year in December passed a special order opposing the elimination of property taxes. It said, in part:

“NDFU supports a tax structure that provides a reasonable balance of income, property and sales tax revenues. We are concerned by the growing burden of property taxes on landowners. We support efforts to reduce the property tax burden while maintaining local services and infrastructure funding.

“NDFU also recognizes the important role property taxes play within a balanced tax structure. Property taxes are levied locally and controlled locally to address local needs. Eliminating property taxes will force political subdivisions to rely on the state for funding critical needs. This will disproportionately harm rural communities and lead to declining services and infrastructure.”

North Dakota Stockmen’s Association

The North Dakota Stockmen’s Association expressed support for property tax reform, but rejected Measure 4 as the solution to property tax issues.

“While the North Dakota Stockmen’s Association supports property tax relief and reform, it is opposed to Measure 4 and is one of more than 100 statewide organizations that comprise the Keep It Local Coalition. We believe the proposal has some inherent flaws that would be the most harmful to rural communities and give out-of-state, non-resident landowners an unfair advantage,” Randy Schmitt, NDSA President, said in a statement.

“Plus, as a Constitutional ballot measure, it would be difficult to change or even refine. We think there are better ways to achieve property tax relief and look forward to being a part of the conversation during the upcoming legislative session and beyond,” Schmitt said.

North Dakota Ag Commissioner

North Dakota Agriculture Commissioner Doug Goehring said Measure 4 has a lot more to it than meets the eye, and expressed doubts about whether it would actually have the intended positive effects. He said there would be a lot of fallout from the passage of the initiative that voters may not know yet, and added that the Department of Agriculture is still going through materials on the matter to get a full understanding.

“The problem with the state is our overall budget is $19.6 billion. But out of the state’s portion, when you break that down, you have special funds of 7.3 billion. You have federal funds of 6.2 billion. That’s money that can’t be tapped into, that’s allocated. It’s purposeful. It has a dedicated use. So you can’t even tap any of that to use it for property tax relief,” Goehring said. 

“What you’re left with is general fund money, and that’s about $6.2 billion. So at 6.2 billion, they’re talking about a fiscal note of probably 3.2 billion. The state would have to come up with extra money in revenue to cover that. And what would likely happen is they would start looking at increasing sales tax, increasing income tax.”

The impact of Measure 4 passing would stretch to current state tax exemptions on agricultural repairs and supplies, Goehring said, potentially resulting in those exemptions being repealed in order to cover the difference from a lack of property tax revenue at the state level. He also added that benefits could be felt more by out-of-state landowners and that, “If this goes through, they won’t have any tax liability and they don’t live here. So guess what? Income tax and sales tax won’t affect them at all. It’ll still be borne by the people of North Dakota.”

Goehring said voters need to “be careful” when considering whether or not to vote for Measure 4.

“Most people don’t understand the unintended consequences,” Goehring said. “This has some long-reaching tentacles, and it can affect people’s personal lives in a very deep way. It will have the opposite effect, in many ways, that people don’t want. That’s what will happen.

“If people want to accuse me of being self-serving because I’m in the executive branch, over 70% of our budget is federal and special funds. When it comes to the general funds, they have to fund us no matter what because they’re laws in Century Code. There are regulatory programs that have to be funded,” Goehring said. “There are regulatory programs that have to be funded. So, whether you’re talking about meat inspection, food poultry inspection, whether you’re talking about some of our fertilizer programs and consumer protection programs, they’re gonna have to operate otherwise, we’re not protecting the consumer, the producer, the purchaser or the seller.”