North Dakotans hope to right property-tax wrong

Izzy Lyman Author, The Homeschooling Revolution
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We Americans view our homes as our castles, but it’s easy to feel like a serf, instead of a lord or lady of the manor, when we are forced to pay “rent” to the government for our abodes (even when we have no mortgage) in the form of a property tax. The scheme has managed to change “home sweet home” into government-owned housing.

The great state of North Dakota is poised to right that wrong.

In June, the state’s residents will have the opportunity to vote on a primary ballot measure that, if approved by voters, would eliminate local property taxes, retroactive on January 1, 2012. North Dakota would be the first state in the nation to do so.

Can I get a FREEDOM shout?

In 2008, property taxes in the Flickertail State accounted for 28.1% of state and local revenue. No chintzy chunk of change. The multimillion-dollar conundrum, of course, is how political subdivisions will fund government services, like education and public safety, if there is no property tax revenue to draw from. The proposed constitutional amendment, which makes an exception for “special assessments,” reads: “The measure would replace the lost revenue with allocations of various state-level taxes and other revenues, without restrictions on how these revenues may be spent.”

There could be no better place than North Dakota, which has the lowest unemployment rate in the country, a thriving energy-based economy and an income tax (cha ching!), to attempt this radical experiment in government by the people, not the special interests, and put the burden on the state, not the homeowner, to find the money to pay the “bills.” If this most distasteful of taxes is booted, perhaps North Dakota’s governor and legislators won’t be as tempted to fritter away the surplus in their state’s budget and public officials will develop a hankering to prioritize spending. They might — and this is admittedly a revolutionary thought — also be motivated to cut waste. (For a plethora of sensible suggestions, they need look no further than the North Dakota Pork Report, published by the North Dakota Policy Council.)

Charlene Nelson, of Empower the Taxpayer, is one of the driving forces behind Measure #2, as it is known. She was instrumental in ensuring that the 30,000 signatures that were needed to get the property tax proposal on a statewide ballot were collected.

Nelson isn’t a slick pol who speaks in market-tested soundbites. Rather, she’s a thoughtful homeschooling mother of three who enjoys gardening, music and astronomy and subscribes to the view that democracy isn’t a spectator sport.

Her involvement in civic causes, with a focus on domesticating state spending in North Dakota, caused her and like-minded residents to ponder the most effective means of institutionalizing meaningful reform.

“Over and over the discussion returned to the property tax,” Nelson wrote me in an email. “It was evident that that was a priority issue. We studied ways it could be reformed or amended, but it is such a complex, almost incomprehensible tax that there was no way to assure our reforms would provide permanent relief. Thus the idea to abolish it altogether was born.”

If the measure passes, North Dakota — famous for its frigid winters, barren landscape and affinity for college hockey — will be poised to become an exceptionally attractive place for seniors on fixed incomes, who are often priced out of their homes due to high real estate taxes, as well as for young couples, who are often priced out of the opportunity to become homeowners due to regressive real estate taxes. The Beacon Hill Institute at Suffolk University, a Massachusetts-based free-market economics think tank, has concluded that abolishing the property tax in North Dakota “would lead to a more vibrant private sector economy.” Recession or not, that’s welcome news for entrepreneurs and the individuals they employ, and a winning strategy to further diversify the economy.

My warmest wool hat’s off to those North Dakotans who not only got this initiative on the ballot but will spend the next six months battling the teachers’ unions (who have pledged millions to fight the measure), the chamber of commerce, the mainstream media and statist attorneys who will ardently oppose them as they attempt to make history.

As Charlene Nelson puts it, “We hope ND will be the Lexington and Concord of a nationwide trend to rein in this most harmful of all taxes.”

Izzy Lyman enjoys writing about the doings of Middle Americans in “Flyover Country.” She is the author of The Homeschooling Revolution.