There have been a lot of questions about how M2 will affect Payment in Lieu of [Property] Taxes (PILT.) The concern is that since much of our state's surplus comes from oil and gas revenues that M2 will put an end to those revenues. This is simply not true.
John Walstad, legal council for the State Legislature wrote a memo that was introduced into the legislative record in November 2011 where he addresses this very question. You can read the entire memo here: HERE. If you want to skip all the legalese and get to the core of the question, go to the bottom of the first column on Page 4: Effect of Measure No. 2 on Existing Tax Type where he begins to explain that a PILT that is based on property value is eliminated, but PILT that is based on something else (i.e. production value, services rendered, etc) is not affected by M2. Then go to Page 5 and scroll through the list of PILTs--mobile home tax, coal conversion tax, transmission line tax and--yes--gas and oil taxes. A few of those will be eliminated because they are based on land value. But the majority of those taxes--including gas and oil--will not be affected by passage of M2.
This isn't us saying this, this is the Legislature's own legal council who says this.
You can breath easier now.
Wednesday, February 22, 2012
Tuesday, February 21, 2012
Sunday, February 19, 2012
The Best Answer Yet to Lloyd Omdahl
GRAND FORKS — Those confounded local government finances! I like Herald columnist Lloyd Omdahl, and if his opposition to Measure 2 wasn’t so unhealthy for North Dakota’s future economy, I’d find it amusing (“Measure 2 confounds local government finances,” Page A4, Feb. 13).
Omdahl warns that “more and more local officials are becoming alarmed over the impact of Measure 2.” (The measure would completely eliminate North Dakota property taxes this year, then replace the funding with other forms of state revenue.)
But which impact is he talking about? Is it the impact of being able to make improvements to your home without being penalized by higher taxes? Is it the impact of increased revenue to the state through the businesses that will expand or relocate here because we’ll have no property taxes?
Is it the impact of knowing that once those companies set up shop, more students who graduate from UND and North Dakota State University actually will be able to find good jobs in North Dakota?
Or, is it the impact that no matter what happens to the income of your parents or grandparents, they’ll be able live out their lives in their paid-off home, without the fear of losing that home to the government due to nonpayment of property-tax “rent”?
Which impact is it? Personally, I kind of like the sound of those impacts, don’t you?...
Omdahl’s column actually argues for protecting “the uniqueness of local governments.” What? How about protecting the widow, the elderly and people on fixed incomes, who have to sell their homes because they can’t afford the property taxes any more? That happens to hundreds of North Dakota families every year.
If we have become a state that has more compassion for protecting “the uniqueness of local governments” than we do for protecting a man’s home from government confiscation, we are in deep trouble.
Read the entire letter and community comments HERE
Omdahl warns that “more and more local officials are becoming alarmed over the impact of Measure 2.” (The measure would completely eliminate North Dakota property taxes this year, then replace the funding with other forms of state revenue.)
But which impact is he talking about? Is it the impact of being able to make improvements to your home without being penalized by higher taxes? Is it the impact of increased revenue to the state through the businesses that will expand or relocate here because we’ll have no property taxes?
Is it the impact of knowing that once those companies set up shop, more students who graduate from UND and North Dakota State University actually will be able to find good jobs in North Dakota?
Or, is it the impact that no matter what happens to the income of your parents or grandparents, they’ll be able live out their lives in their paid-off home, without the fear of losing that home to the government due to nonpayment of property-tax “rent”?
Which impact is it? Personally, I kind of like the sound of those impacts, don’t you?...
Omdahl’s column actually argues for protecting “the uniqueness of local governments.” What? How about protecting the widow, the elderly and people on fixed incomes, who have to sell their homes because they can’t afford the property taxes any more? That happens to hundreds of North Dakota families every year.
If we have become a state that has more compassion for protecting “the uniqueness of local governments” than we do for protecting a man’s home from government confiscation, we are in deep trouble.
Read the entire letter and community comments HERE
Thursday, February 16, 2012
Is Keep it Local Really Local?
Two-thirds of the budget for the anti-M2 group calling themselves "Keep It Local" comes from the National Education Association. That's right the national teacher's union has contributed $35,000 to KIL's campaign treasury. What do you think about a national union influencing our tax system?
Financial Disclosure
Financial Disclosure
What's Wrong with Commissioner Fong's Presentation?
Some may think it's a little presumptuous of us to ask elected officials, especially Tax Commissioner Cory Fong, to stop lying. What's wrong with what Mr. Fong is saying? Well, judge for yourself. Here is the power-point presentation that Mr. Fong is giving to groups around the state:
Impact of Property Taxes
And here's the Tax Commissioner's 2010 Overview of Taxes:
ND Red Book
You'll need to place these two reports side by side. When Mr. Fong's presentation says there are three sources of revenue for the state (three-legged stool) look at page 2 of the Red Book. How many revenue sources are listed there?
Mr. Fong also gives 2010 numbers for those taxes. Do those numbers match up with what's in the Red Book? Well, they're kind of close, so maybe there are some tricky accounting things he uses that would explain those differences. Or maybe they are typos. But the number he gives for the 2010 Property Taxes are clearly NOT 2010 taxes.
Look at Page 90 of the Red Book and you'll see how the numbers simply don't match up. In fact, Mr. Fong is off by over 20%. Then using inflated PT numbers Mr. Fong says that PT makes up 37% of state revenues. And using those inflated numbers Mr. Fong says that sales tax will have to be doubled and income tax will go up 279%.
Mr. Fong says that school funding (which is where 45% of the PT goes) will be replaced by oil revenues. I'm not sure why he assumes this will happen, but well, OK. Let's say oil revenues do indeed fund K-12. So why, then, do sales taxes need to double if half of the PT expenses are being paid for by oil revenues?
Remember that Mr. Fong is only the tax commissioner. He does not decide tax policy. there is reason to assume that these taxes will need to be increased as a result of eliminating PT. The Legislature could decide to cut out the pork. They could decide to take more from gaming or lottery taxes, coal or liquor taxes. They could decide to fund the whole thing with oil revenues--heaven knows there's more than enough! There is simply no justification for Mr. Fong to assert that these taxes WILL go up.
From top to bottom Mr. Fong's presentation is filled with error and assumptions that are a shame to someone who is supposed to report facts and usable information to the voters of this state. We are asking him, along with all elected officials, to contribute to the debate with reliable, honest information, not scare tactics and misinformation.
Impact of Property Taxes
And here's the Tax Commissioner's 2010 Overview of Taxes:
ND Red Book
You'll need to place these two reports side by side. When Mr. Fong's presentation says there are three sources of revenue for the state (three-legged stool) look at page 2 of the Red Book. How many revenue sources are listed there?
Mr. Fong also gives 2010 numbers for those taxes. Do those numbers match up with what's in the Red Book? Well, they're kind of close, so maybe there are some tricky accounting things he uses that would explain those differences. Or maybe they are typos. But the number he gives for the 2010 Property Taxes are clearly NOT 2010 taxes.
Look at Page 90 of the Red Book and you'll see how the numbers simply don't match up. In fact, Mr. Fong is off by over 20%. Then using inflated PT numbers Mr. Fong says that PT makes up 37% of state revenues. And using those inflated numbers Mr. Fong says that sales tax will have to be doubled and income tax will go up 279%.
Mr. Fong says that school funding (which is where 45% of the PT goes) will be replaced by oil revenues. I'm not sure why he assumes this will happen, but well, OK. Let's say oil revenues do indeed fund K-12. So why, then, do sales taxes need to double if half of the PT expenses are being paid for by oil revenues?
Remember that Mr. Fong is only the tax commissioner. He does not decide tax policy. there is reason to assume that these taxes will need to be increased as a result of eliminating PT. The Legislature could decide to cut out the pork. They could decide to take more from gaming or lottery taxes, coal or liquor taxes. They could decide to fund the whole thing with oil revenues--heaven knows there's more than enough! There is simply no justification for Mr. Fong to assert that these taxes WILL go up.
From top to bottom Mr. Fong's presentation is filled with error and assumptions that are a shame to someone who is supposed to report facts and usable information to the voters of this state. We are asking him, along with all elected officials, to contribute to the debate with reliable, honest information, not scare tactics and misinformation.
Wednesday, February 15, 2012
NEW NEW NEW Calendar Page
We just added a new feature to our webpage: A calendar of all the radio and TV appearances, debates and other events that Empower the Taxpayer will be participating in. Check frequently because new things are being added. Quite often with radio and TV we only have 2-3 hours warning but we'll try to get it up as soon as we know.
Monday, February 6, 2012
Rebuttal to GF Herald Opinion
Below is a rebuttal to the GF Herald submitted by a supporter of M2:
In the February 4 issue of the Grand Forks Herald Opinion Tom Dennis tries to justify that Measure 2 is a very bad idea from the government’s & business point of view. But what about all the rest of North Dakota residents? He does not mention a single positive reason why it is on the ballot in the first place.
We all know why Measure 2 is on the ballot. It will free the homeowners from the perpetual serfdom to the government and stop any further abuse of the taxpayers. For Tom Dennis, and others associated with the “keep it LOCAL”, to ignore these important facts is truly amazing. But what is more amazing is that Tom Dennis is implying that the group responsible for Measure 2, is trying to destroy the local form of government in North Dakota.
It is clear that Tom Dennis and the “keep it LOCAL” organization have not read the facts about Measure 2. But even if they have not read it, there is no excuse to condemn M2 with dogmatic rhetoric that it is inferior to the status quo of the present property tax concept. I don’t know of any other tax that violates our basic rights as much as the property tax does. How can Measure 2 be inferior when it will restore our basic rights?
Tom Dennis is implying that there will be a tax revenue vacuum to the local governments if Measure 2 is passed. He will blush with shame after he reads the whole text of Measure 2. But even for people who don’t want to read the whole text of Measure 2, it is illogical that there would be a tax vacuum to the local governments. We all understand that all of our tax dollars come from our personal incomes, including property taxes. By eliminating the property tax does not mean that the over all tax burden will automatically drop by the amount we pay in present property taxes. It just means that the tax base is changed from home values to personal incomes.
So, why is Tom Dennis and the “keep it LOCAL” group preaching doomsday to local governments by merely changing the tax base for our local government tax revenue? At the present time, there is an established hierarchy of administration between the taxing districts, county, city and township governments. That will not change when Measure 2 is passed. Measure 2 will just make it more efficient to administer the tax revenue to the local governments.
We constantly hear about government waste and duplication. North Dakota’s present property tax concept is no exception to this duplication and waste. One does not have to be a member of a “think tank” to see what obvious waste and duplications will be eliminated when Measure 2 is passed. Tom Dennis and the “keep it LOCAL” group’s nostalgia, for the status quo property tax, leaves a lot to be desired. It is like insisting to use an antiquated outdoor toilet when we have indoor plumbing. And who thinks that is is OK for the local government to pass judgment on how wealthy we are by sending out an assessor to snoop at our homes?
Read the editorial here:
http://www.grandforksherald.com/event/article/id/228554/group/Opinion/
In the February 4 issue of the Grand Forks Herald Opinion Tom Dennis tries to justify that Measure 2 is a very bad idea from the government’s & business point of view. But what about all the rest of North Dakota residents? He does not mention a single positive reason why it is on the ballot in the first place.
We all know why Measure 2 is on the ballot. It will free the homeowners from the perpetual serfdom to the government and stop any further abuse of the taxpayers. For Tom Dennis, and others associated with the “keep it LOCAL”, to ignore these important facts is truly amazing. But what is more amazing is that Tom Dennis is implying that the group responsible for Measure 2, is trying to destroy the local form of government in North Dakota.
It is clear that Tom Dennis and the “keep it LOCAL” organization have not read the facts about Measure 2. But even if they have not read it, there is no excuse to condemn M2 with dogmatic rhetoric that it is inferior to the status quo of the present property tax concept. I don’t know of any other tax that violates our basic rights as much as the property tax does. How can Measure 2 be inferior when it will restore our basic rights?
Tom Dennis is implying that there will be a tax revenue vacuum to the local governments if Measure 2 is passed. He will blush with shame after he reads the whole text of Measure 2. But even for people who don’t want to read the whole text of Measure 2, it is illogical that there would be a tax vacuum to the local governments. We all understand that all of our tax dollars come from our personal incomes, including property taxes. By eliminating the property tax does not mean that the over all tax burden will automatically drop by the amount we pay in present property taxes. It just means that the tax base is changed from home values to personal incomes.
So, why is Tom Dennis and the “keep it LOCAL” group preaching doomsday to local governments by merely changing the tax base for our local government tax revenue? At the present time, there is an established hierarchy of administration between the taxing districts, county, city and township governments. That will not change when Measure 2 is passed. Measure 2 will just make it more efficient to administer the tax revenue to the local governments.
We constantly hear about government waste and duplication. North Dakota’s present property tax concept is no exception to this duplication and waste. One does not have to be a member of a “think tank” to see what obvious waste and duplications will be eliminated when Measure 2 is passed. Tom Dennis and the “keep it LOCAL” group’s nostalgia, for the status quo property tax, leaves a lot to be desired. It is like insisting to use an antiquated outdoor toilet when we have indoor plumbing. And who thinks that is is OK for the local government to pass judgment on how wealthy we are by sending out an assessor to snoop at our homes?
Read the editorial here:
http://www.grandforksherald.com/event/article/id/228554/group/Opinion/
Saturday, February 4, 2012
NORTH DAKOTA REALLY DOESN'T HAVE ANY MONEY
Here is a recent post in Say Anything Blog about ND's finances:
http://sayanythingblog.com/entry/guest-post-north-dakota-really-doesnt-have-the-money/
Mr. Busek brings out an important point that I think many are not aware of: this surplus that you're always hearing about? It is not the accumulation of years of excess revenues. But this is the excess that was generated just since the last legislative session and is money over and above what the state has budgeted to spend. In 2011 the state had ANOTHER $2B surplus and the state spent it all.
Yes, you read that right: Every single penny of the 2009-2011 surplus was spent in the last budget. And in 2009, there was another surplus and the state spent all of that one as well. The current $1.8 billion (and rising) surplus that's pouring into state coffers right now is also slated to be spent, unless we pass M2.
Mr. Busek is right to be concerned with that state of North Dakota’s fiscal safety, security and money management. While ND is blessed with incredible natural resource wealth, it is not blessed with responsible management of that wealth. Instead of managing our wealth the Legislature has been on a 10 year spending binge. That spending binge goes unabated. State spending of taxpayer money has increased more than 135% in ten years, while personal income growth has gone up 61% and the CPI 26%. Instead of decreasing taxes the legislature has recklessly given hundreds of millions to special interests and spent lavishly on virtually everything imaginable. While we have the lowest unemployment in the country and thousands of jobs unfilled – the legislature increased State taxpayer spending (non-federal spending) on welfare from $650 million to $932 million this last legislative session. North Dakota taxpayers spend $200 million each year to subsidize non-resident college student tuition and are then told by the Legislature if they need schools to tax themselves again to get them! Remember the 5% state sales tax was originally intended to be used to provide basic government services to our political subdivision, not pay for non-resident college tuition or grow a massive welfare bureaucracy. Welfare consumes K-12 education; 2 ½ times public safety cost and almost 3 times what we spend on roads.
NORTH DAKOTA’S BUDGET IS SERIOUSLY MISMANAGED.
MEASURE 2 will stop much of this non-sense by constitutionally requiring the STATE fund basic government services before they can fund discretionary and special interest wants. This is why these entities oppose M2.
http://sayanythingblog.com/entry/guest-post-north-dakota-really-doesnt-have-the-money/
Mr. Busek brings out an important point that I think many are not aware of: this surplus that you're always hearing about? It is not the accumulation of years of excess revenues. But this is the excess that was generated just since the last legislative session and is money over and above what the state has budgeted to spend. In 2011 the state had ANOTHER $2B surplus and the state spent it all.
Yes, you read that right: Every single penny of the 2009-2011 surplus was spent in the last budget. And in 2009, there was another surplus and the state spent all of that one as well. The current $1.8 billion (and rising) surplus that's pouring into state coffers right now is also slated to be spent, unless we pass M2.
Mr. Busek is right to be concerned with that state of North Dakota’s fiscal safety, security and money management. While ND is blessed with incredible natural resource wealth, it is not blessed with responsible management of that wealth. Instead of managing our wealth the Legislature has been on a 10 year spending binge. That spending binge goes unabated. State spending of taxpayer money has increased more than 135% in ten years, while personal income growth has gone up 61% and the CPI 26%. Instead of decreasing taxes the legislature has recklessly given hundreds of millions to special interests and spent lavishly on virtually everything imaginable. While we have the lowest unemployment in the country and thousands of jobs unfilled – the legislature increased State taxpayer spending (non-federal spending) on welfare from $650 million to $932 million this last legislative session. North Dakota taxpayers spend $200 million each year to subsidize non-resident college student tuition and are then told by the Legislature if they need schools to tax themselves again to get them! Remember the 5% state sales tax was originally intended to be used to provide basic government services to our political subdivision, not pay for non-resident college tuition or grow a massive welfare bureaucracy. Welfare consumes K-12 education; 2 ½ times public safety cost and almost 3 times what we spend on roads.
NORTH DAKOTA’S BUDGET IS SERIOUSLY MISMANAGED.
MEASURE 2 will stop much of this non-sense by constitutionally requiring the STATE fund basic government services before they can fund discretionary and special interest wants. This is why these entities oppose M2.
Thursday, February 2, 2012
$$$ URGENT: DONATE TODAY $$$
The Anti-M2 group is well-funded--with YOUR tax money. Yes, that's right. The group that calls itself Keep it Local is made up of ND League of Cities, ND Assoc. of Counties and ND Chamber of Commerce, all of which receive taxpayer money. If we are going to get our message out, we need donations TODAY.
$20, $50, $100, $500, every little bit helps. Click the button on the left or the link in the title to donate.
$20, $50, $100, $500, every little bit helps. Click the button on the left or the link in the title to donate.
Wednesday, February 1, 2012
Does This Make You Laugh or Cry?
Here is a news report from today's Bismarck Tribune on the recent increases in Ag-land valuations. When I read this I don't know whether to laugh or cry. It almost makes my head explode, it is so incomprehensible.
Folks, this is what our opponents call "keeping it local." What do you call it?
Excerpt:
"Staff from the North Dakota Tax Commissioner's office and the Agriculture Department held a meeting Wednesday afternoon to provide information on why owners of agricultural land are facing a nearly 30 percent increase in land values in 2012...Goehring said the primary reason for the increase in land value was because of a lowering of the capitalization rate for agricultural land.
Goehring said a statutory minimum capitalization rate, or "floor," was set by the Legislature in 2004 at 9.5 and had declined to 7.4 percent by 2011. The floor lapsed after 2011. When the capitalization rate is lowered, it results in higher land values.
Fong explained that when the floor set by the Legislature lapsed, the rate was determined for 2012 using the method used prior to the floor being set. The capitalization rate, therefore, was calculated using the 10-year average of mortgage rates on North Dakota farmland loans. The rate is determined by the Agribank mortgage rate of interest for North Dakota.
Using that form of calculation rather than the floor set by the Legislature, the rate was lowered from 7.4 percent to 5.864 percent for 2012.
"That contributes to 26 percent of the 29 percent increase," Fong said.
Two other factors also played a minor role in the increase, Fong said.
One factor is production data, which is the annual gross returns for cropland and non-cropland. After taking production data from the previous 10 years and dropping the high and low production year, an eight-year average is calculated. Higher production leads to higher values. For 2012, increases ranged from 5.9 percent to 17.4 percent for cropland. Non-cropland production increased by approximately 1.9 percent.
The other factor is the cost of production index. It is calculated by using input costs such as fertilizer, fuel and equipment as well as wages and taxes. After taking 10-year data, dropping the high and low years, an eight-year average is calculated. For 2012, Fong said, the cost of production index increased to 1.47, up from 1.39 in 2011. That resulted in a 5.4 percent decrease in land agricultural values for all North Dakota counties."
Read the entire article: http://bismarcktribune.com/news/local/govt-and-politics/officials-explain-why-land-values-are-increasing/article_f146c144-47ab-11e1-ad8f-001871e3ce6c.html
Folks, this is what our opponents call "keeping it local." What do you call it?
Excerpt:
"Staff from the North Dakota Tax Commissioner's office and the Agriculture Department held a meeting Wednesday afternoon to provide information on why owners of agricultural land are facing a nearly 30 percent increase in land values in 2012...Goehring said the primary reason for the increase in land value was because of a lowering of the capitalization rate for agricultural land.
Goehring said a statutory minimum capitalization rate, or "floor," was set by the Legislature in 2004 at 9.5 and had declined to 7.4 percent by 2011. The floor lapsed after 2011. When the capitalization rate is lowered, it results in higher land values.
Fong explained that when the floor set by the Legislature lapsed, the rate was determined for 2012 using the method used prior to the floor being set. The capitalization rate, therefore, was calculated using the 10-year average of mortgage rates on North Dakota farmland loans. The rate is determined by the Agribank mortgage rate of interest for North Dakota.
Using that form of calculation rather than the floor set by the Legislature, the rate was lowered from 7.4 percent to 5.864 percent for 2012.
"That contributes to 26 percent of the 29 percent increase," Fong said.
Two other factors also played a minor role in the increase, Fong said.
One factor is production data, which is the annual gross returns for cropland and non-cropland. After taking production data from the previous 10 years and dropping the high and low production year, an eight-year average is calculated. Higher production leads to higher values. For 2012, increases ranged from 5.9 percent to 17.4 percent for cropland. Non-cropland production increased by approximately 1.9 percent.
The other factor is the cost of production index. It is calculated by using input costs such as fertilizer, fuel and equipment as well as wages and taxes. After taking 10-year data, dropping the high and low years, an eight-year average is calculated. For 2012, Fong said, the cost of production index increased to 1.47, up from 1.39 in 2011. That resulted in a 5.4 percent decrease in land agricultural values for all North Dakota counties."
Read the entire article: http://bismarcktribune.com/news/local/govt-and-politics/officials-explain-why-land-values-are-increasing/article_f146c144-47ab-11e1-ad8f-001871e3ce6c.html
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