Abolishing Property Taxes - Defeated!

On the face of it, I would think that a vote on abolishing property taxes would have a high likelihood of passing. But it didn’t!  Yesterday in North Dakota, voters defeated a referendum on this very issue – a change to the state constitution that would abolish property taxes.  If it had passed, North Dakota would have become the only state to not have a property tax.

In North Dakota, as in most states, the property tax revenue is used to fund local governments and schools. At the local government level, property taxes provide the revenue to pay for police, fire, sanitation, infrastructure building and maintenance, recreation and a variety of other services. The cost of these services includes the personnel component including salaries, pensions and insurance.– the latter two mandated by the state.

Proponents argued that they could lose their property if they didn’t pay their taxes and that, therefore, property taxes are inconsistent with the concepts of property ownership.  Another factor in this case was that North Dakota’s coffers are overflowing in money right now due to a prosperity fueled by their oil boom. 

Opponents included most of the state’s political and business groups including the North Dakota Chamber of Commerce,  elected officials, farm groups and unions.  They argued that the proposal calls for the State to pay for the school and local government costs but it doesn’t  specify how this would be done.  They predicted chaos in its implementation.

On June 12, the referendum failed to get approval from North Dakotans.  It seems the attractiveness of not paying property taxes was more than balanced by voters’ understanding and appreciation of the services provided at the local level.  Rather, the North Dakotan electorate demonstrated that an informed electorate in which reason, and not just the pocket book, prevailed.