Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Home Rule Sales Tax topic
No spam. Unsubscribe anytime.
Proposal would cap home-rule sales, use and gross-receipts taxes at 3%; cities, counties urge caution
Summary
House Bill 1552 would limit home-rule political subdivisions to a 3% cap on local sales, use or gross-receipts taxes; local governments warned a statutory cap would limit local control and asked the committee to reject the proposal or consider targeted alternatives.
Representative Craig Hedlund opened a Finance and Taxation Committee hearing on House Bill 1552, saying the bill would cap sales, use and gross-receipts taxes levied under home-rule authority at 3 percent. Hedlund said the intent is to protect state competitiveness and state revenue streams while giving predictability about the local sales-tax ceiling.
Witnesses representing cities and counties urged the committee to reject a statutory cap. Bill Wilkin of the North Dakota League of Cities said no city or county he knows has exceeded a 3 percent local sales tax and that placing a statutory ceiling now would hamper local flexibility for large capital projects and business-attraction strategies. Danelle Presky of the North Dakota Association of Counties said nine counties currently collect a home-rule sales tax, most at or below 1 percent, and that home rule is a local tool voters use to reduce property-tax burden.
Public-policy advocates offered more nuanced proposals. Dustin Gervalo of the North Dakota Watchdog Network proposed differentiating dedicated and nondedicated sales levies: he suggested exempting narrowly dedicated levies (for example, law enforcement, jails or state-attorney budgets) from the cap, allowing conversion of current nondedicated levies into dedicated levies with a lower voter threshold, and requiring periodic renewal and segregation of dedicated revenues. Gervalo said such changes would preserve local control for core services while limiting the use of sales tax for general-government growth.
Committee members asked whether a cap makes sense given recent property-tax pressures. Supporters of the bill said a 3 percent cap would be a safeguard if property-tax caps push local governments to seek sales-tax revenue; opponents said voter control and local accountability are preferable to a statutory ceiling imposed by the Legislature.
The committee heard testimony from multiple stakeholders and closed the hearing with no formal vote recorded.
