North Dakota legislatures propose 3% cap on property tax with new funding program

In a recent meeting of the North Dakota Senate Finance and Taxation Committee, lawmakers discussed significant reforms aimed at providing property tax relief to residents. Central to the discussions was House Bill 1176, which proposes a $14.50 increase in the primary resident credit, building on previous tax relief efforts. This increase is expected to benefit many families, particularly those with lower incomes, as it aims to alleviate the financial burden of property taxes.

The bill also includes a notable change to the homestead credit tax program, raising income thresholds for eligibility by $10,000. This adjustment is designed to assist more families in accessing tax credits, with the renters' refund increasing from $400 to $600. The overall funding for these initiatives is projected at approximately $473 million, sourced from both the legacy earnings fund and the general fund.

Another key aspect of the bill is the introduction of a 3% cap on property tax levies. This cap is intended to limit the amount that property owners will pay, ensuring that increases remain manageable. However, political subdivisions can seek voter approval to exceed this cap for up to four years if they demonstrate a need for additional funding. This provision aims to balance local control with the need for fiscal responsibility.

The committee expressed strong support for the bill, highlighting its potential to provide much-needed relief to North Dakota residents. With an estimated 163,000 properties affected, the reforms could significantly reduce tax liabilities for many families, with projections indicating that around 50,000 properties could see their tax burdens limited under the new measures.

As the legislative session progresses, the committee's discussions reflect a commitment to addressing the financial challenges faced by residents, with a focus on sustainable and impactful tax reforms. The proposed changes are expected to be a pivotal step in enhancing the economic well-being of North Dakota families, ensuring that property tax relief remains a priority for lawmakers.