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Committee reviews Tax Commissioner's budget; Gentax maintenance, IT and outreach funding draw questions
Summary
Lawmakers reviewed the Tax Commissioner's budget and discussed a $450,000 increase for Gentax software support, a roughly $358,000 IT rate adjustment, office rent and funding to administer property-tax relief programs including primary residence credits.
BISMARCK, N.D. — The House Appropriations Government Operations Division reviewed the Tax Commissioner's budget (bill 1006) and focused on contract and operating costs for the state's tax-processing system, information-technology charges and resources to administer property-tax relief programs.
The discussion matters for taxpayers because changes in vendor support and IT costs affect the department's ability to process returns, deliver refunds and administer new or renewed property-tax relief programs such as the primary residence credit and homestead programs.
Treasurer Croixus, addressing technical questions about the GenTax contract, said the current legislative base includes a $4,400,000 baseline for GenTax maintenance and support. The department requested an additional $450,000 in the next biennium to cover an expected contract price increase; the new maintenance total is $4,852,000. "Every biennium, we are typically faced with a price increase from the vendor," the treasurer said.
Members questioned information-technology cost increases billed through the state's IT provider. The department's base IT charges were cited at about $1,495,000; the requested NDIT/IT rate adjustment is $358,321, which amounts to roughly a 20% increase on that base. Committee members also noted the capital tower rent rate: staff reported office space in the Capitol tower is charged at $16.21 per square foot and that the same per-square-foot rate applies to agencies in the tower.
Lawmakers discussed outreach and administrative resources tied to proposed or potential property-tax relief. The Tax Department received one-time funding of $1,500,000 in the previous biennium to program and market the primary residence credit; the department said it used roughly $1,000,000 nd would need a similar amount again if the program continues. The department warned that program administration generated heavy demand: outreach and application processing can generate tens of thousands of contacts during application seasons; the department estimated a substantial increase in call volume tied to such programs.
Committee members also discussed a broader budget issue: the governor's request that agencies identify a 3% base reduction for the executive base. Staff explained the appropriation worksheets at the hearing show the legislative base (the starting point the legislature uses) differs from the governor djusted base. Lawmakers said the differing bases across agencies complicate comparisons and asked staff to clarify the numbers when the committee adopts amendments.
On committee direction, members asked that staff incorporate the GenTax support increase, the IT rate adjustment and the capital-rent adjustments into the house worksheet and draft amendment language. The committee declined to add a separate new-vacant FTE pool at this time and noted a separate bill (tax information portal) already contains an appropriation if needed. Members also asked staff to ensure any marketing and programming funding for property-tax relief proposals is tracked to the bill that ultimately becomes the vehicle for relief (for example, HB 1176). No roll-call votes were recorded at the hearing; staff were instructed to reflect the committee consensus in the draft amendment.
The committee scheduled follow-up work and asked staff to circulate a redlined amendment for review before the next meeting.
