Local officials weigh in on Measure 4

This November, voters will decide whether to eliminate valuation-based property taxes in the state of North Dakota.

The issue will appear on November ballots as Measure 4, which would specifically prohibit all political subdivisions in North Dakota – such as counties, school districts and cities – from collecting tax based on the assessed value of property.

The measure was placed on the ballot after a petition gathered enough signatures to qualify, and now its proponents and opponents are criss-crossing the state to make their case.

If approved, North Dakota would become the first and only state in the country to largely eliminate property taxes, thus ending a major source of income for the state and local governments. A similar initiative was rejected by voters back in 2012.

According to N.D. Legislative Management, the estimated fiscal impact of Measure 4 would be a $3.15 billion increase in biennial expenditures beginning in the 2025-2027 biennium.

Property tax revenue in North Dakota currently funds numerous essential services in communities across the state, including water, sewage, fire departments, law enforcement and road repairs, just to name a few.

Local elected officials are arguably the most familiar with the funding local governments require, and they will have to address the consequences of Measure 4 should it pass.

With that in mind, the Independent reached out to nearly every elected official in Eddy and Foster counties to gauge their opinions on Measure 4. They include members of both county commissions, the New Rockford and Carrington city governments, and both the Carrington and New Rockford-Sheyenne school boards.

The Independent found that opposition to the measure was nearly unanimous among local officials. Of the 22 who responded, 19 said they intend to vote "no" on Measure 4, only one intends to vote "yes," and two said they're still undecided.

Every official who spoke to the Independent did so on their own behalf. The opinions they expressed are their own and do not represent the official positions of their respective local governments.

The "vote no" argument

Those who oppose eliminating property taxes – and will therefore be voting "no" on Measure 4 – include Carrington School Board President Joel Lemer; Carrington Mayor Tom Erdmann; New Rockford Commission President Stu Richter; NR-S School Board President Todd Allmaras; Foster County Commission Chairman David Utke and Eddy County Commission Chairperson Jamie Allmaras.

The primary concern among most officials seems to be how local governments would be funded without revenue from property taxes.

"The Carrington School District relies on property taxes as 25% of its revenue source," said Carrington School Board President Joel Lemer. "To remove 25% of the District's revenue source, without a guaranteed replacement source, would be disastrous to the district and the students and patrons that the district serves."

Measure 4 would require the N.D. Legislature to replace any lost tax revenue suffered by local governments, but does not stipulate how the state will acquire the funding to replace those tax dollars, though many suggest utilizing the oil tax savings in the state's Legacy Fund.

Additionally, Measure 4 does not provide for any increases in funding. The legislature would be required to replace a local government's lost tax revenue based on 2024 figures, and nothing more. Any funding required to account for inflation or new projects in future years would have to be raised a different way.

Primarily though, it's the lack of any plan regarding where the replacement funds will come from that seems to be the sticking point for many officials.

"Abolishing an established revenue stream that is critical to so many levels of local government and not having a solid plan to replace it, is reckless at best," said Todd Allmaras, NR-S School Board President.

"Sure, supporters of this measure can throw numbers on a whiteboard and make it look like the math works out, but these are nothing more than concepts and ideas," he added. "Concepts and ideas do not pay teachers, heat schools, move snow or drive the ambulance down a dusty gravel road for years to come. For me, before we look at radical changes like this, we need to have solid, steadfast plans in place to make an informed decision; this measure lacks that."

Meanwhile, local officials are also concerned about leaning on the state legislature – and potentially oil revenue – for such a significant portion of their funding.

Carrington mayor Tom Erdmann said, "What happens if oil extraction revenue falls below current levels and the State mandates that all entities presently getting their revenue from property tax will only receive a fraction of their needed revenue?"

Carrington City Council member Jesse Nelson added, "Eliminating property taxes would undermine the ability of local governments to address community problems, making them reliant on state legislators sitting in Bismarck. Local governments understand community needs better than the state legislature."

Several officials also argued that Measure 4 will require increasing other taxes, and would ultimately have a negative impact on those who don't have large or multiple properties.

"The elimination of property taxes will most likely cause a major increase of State income tax, increase sales tax and most likely add a direct charge for services provided by all the entities presently operating with property tax revenue," said Erdmann.

Foster County Commission Chairman David Utke added, "In Foster County in 2023, six out of the top 10 real estate taxpayers resided out of state and nine resided outside the county. It seems certain to me that our residents would face an increased burden with any method used to replace the lost revenue. I don't know how a resident wanting to start a farm or business could compete with out-of-state entities that would not have the tax burden."

Overall, the opposition toward Measure 4 among local officials doesn't appear to mean they oppose eliminating property taxes or major tax cuts. In fact, several said they're open to such ideas, just not without a concrete plan for how those funds would be replaced.

"I do not support this [measure] the way it is currently written," said Zachary Fleming, a New Rockford City Commissioner. "I do believe there is an opportunity for a more defined bill in the future that I may support."

Eddy County Commissioner Glenda Collier added, "The concept of property tax relief in the form of residents of North Dakota not having to pay them is fantastic, but at this time there are still too many areas that need to be worked out, that the measure doesn't give clarification to."

Organizations who've announced their opposition to Measure 4 include the North Dakota Farmers Union, the N.D. League of Cities, the N.D School Board Association, the North Dakota AFL-CIO, the N.D. Association of Counties and the Chiefs of Police of North Dakota, among others.

The "vote yes" argument

Not every local elected official opposes Measure 4.

Jacob Dauenhauer, who was recently elected to the New Rockford City Commission in June, was the only official who told the Independent they support the effort to eliminate property taxes.

Dauenhauer said he was initially reluctant to voice his opinion in support of Measure 4, but ultimately feels obligated to do so.

"I feel the good of measure 4 definitely outweighs the bad," he said. "I don't think it's fair that retired elderly couples that have worked hard all their lives have to pay taxes on a property until the day they die. And with that being said, does a person ever really own their property?

"I feel change can be scary and sometimes new ideas can seem 'radical.' When researching Measure 4, I came across some interesting statistics," he added. "Statewide polling shows 65-70 percent of North Dakotans are in support of measure 4. Also, several big endorsements have come forward for this measure in the past several months. ... What family in your community wouldn't benefit from some extra income?"

End Unfair Property Tax, the group led by former state representative Rick Becker working to pass Measure 4, argues their initiative provides much-needed tax relief for property owners without harming essential services.

"When passed, this measure will position North Dakota as the number one place for young families and businesses to relocate," states Becker in a press release. "We will finally solve the problems of workforce development and economic diversification. In fact, when passed, the economy of North Dakota will soar, leaving the other 49 states behind."

Becker said local governments would receive funding from the state to make up for the lost income from property taxes, and that there are other options to find income should a political subdivision decide it needs more revenue.

For example, Measure 4 does not eliminate all forms of property tax. Local governments could still levy a tax or fee on property owners based on parcel size, road frontage or the size and type of buildings on the property. But they would not be able to levy taxes based on assessed value.

Recently, Measure 4 received the endorsement of the North Dakota Farm Bureau (NDFB) following a vote by their members, arguably the measure's most notable endorsement yet.

"The freedom to own property is the foundation of our American dream," NDFB President Daryl Lies said in a press release. "We believe the passage of Measure 4 will enhance our freedom by removing valuation-based taxation of our private property."

For more information

NR-S School Board Vice President Mike Schaefer, as well as NR-S board member LeAnn Drake both said they're undecided on Measure 4, and need to learn more before casting their vote.

Anyone who feels the same can find the complete legislative text of Measure 4 on the North Dakota Secretary of State's website at http://www.sos.nd.gov.

In addition to the full text, there is also information about the measure's financial impact, as well as ballot language and analysis.

To hear more from those who oppose Measure 4, visit the website of "Keep It Local," a coalition of groups who've come out against the ballot measure. Their website is keepitlocalnd.org.

To hear more from those who support the measure, visit the website of End Unfair Property Tax, the group leading the effort to pass Measure 4. Their website is endpropertytax.com.

Answer our quick poll to give us instant feedback about this measure: