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State budget director explains how House Bill 1176 affects local property levies and homeowner credits
Summary
Joe Morrissette of the State Office of Management and Budget told the Bismarck City Commission HB1176 raises the primary-residence credit to $1,600 (funded from the legacy fund) and imposes a 3% cap on increases in property tax levies for political subdivisions, while leaving many revenue streams and new property outside the cap.
Joe Morrissette, director of the State Office of Management and Budget, told the Bismarck City Commission on Aug. 26 that House Bill 1176 will increase the state's primary-residence property tax credit from $500 to $1,600 and dedicate the funding to the legacy fund rather than the general fund.
"The main thing it does is it increases that primary residence credit ... to $1,600," Morrissette said, and he described how the change is paid from legacy earnings rather than general revenues. Morrissette said the legislative package also imposes a 3% cap on growth of property-tax levies for political subdivisions, subject to numerous exclusions and calculation options built into statute.
Morrissette walked commissioners through the mechanics: the 3% cap applies to levies on property that was taxable the prior year and excludes new property and certain levies (for example, debt service and specified statewide levies). Using a hypothetical city example, he showed how officials must compare a "base-year" and an "adjusted-year" calculation and use whichever yields the higher allowable levy for the municipality.
He cautioned that the cap does not directly limit the assessed value of individual parcels. "The 3% cap applies on the city budget," Morrissette said, "and the impact on the individual taxpayer is going to depend on their own change in assessed value." In his examples, some homeowners could see their gross bills fall while others face increases depending on how their valuation changed relative to the mill-rate adjustment. Morrissette added that taxpayers who qualify for the expanded $1,600 credit should see substantial reductions in net bills.
Commissioners pressed for local detail. Commissioner Zanker said some residents interpreted the law as a 3% cap on individual bills; Morrissette acknowledged confusion and told the commission he was willing to answer questions. Mayor Schmitz and others asked staff to provide parcel-level counts showing how many properties would see valuation increases exceeding 3% so the commission could quantify local impacts ahead of final budget decisions.
No formal action was taken; Morrissette's presentation was accepted for information and staff were asked to return with local figures.
