BISMARCK – A House committee looking at a number of property tax relief and reform bills examined on Wednesday a Minot legislator’s approach that calls for a state buyout of a school levy and political subdivision levy caps.

“I put a lot of time and effort into this – about 14 months of going around the state and talking to people,” said Rep. Scott Louser, R-Minot, sponsor of House Bill 1168.

“I would like to say that we have a perfect bill,” he added. “This isn’t perfect. I would like it to be. And after a year and a couple of months, we’re close – closer.”

The bill would have the state assume the 60 mills that school districts are mandated to levy – but only on residential property. Districts still could levy the tax on other property types. Schools also would retain the ability to levy for certain purposes, including a 10-mill cap in the general fund and 12 mills for miscellaneous that generally is used for transportation, Louser told the House Finance and Taxation Committee. However, school districts could not increase their levies beyond limits approved by the state without voter approval.

The bill also limits mill levy increases of political subdivisions other than school districts to 3% annually unless a higher amount is approved by voters.

Assumption of the 60 mills would cost the state $292 million in the 2025-27 biennium, according to the bill’s fiscal note.

Committee members questioned the impact of selective property tax relief on bond issue votes. The implication was that it might be easier for residents to vote for a bond issue when their general taxes are lower, although owners of other property classes that aren’t receiving tax relief will be subject to helping pay for those bonds.

“There’s already a natural inequity among property classes on education funding just because of where you’re located in the state,” Committee Chairman Craig Headland, R-Montpelier, said. “In my home school district, the auditor told me a few years back that 93 percent of the tax value is ag property. If you go out to McKenzie County, I’m assuming centrally assessed is paying the bulk of it, and commercial. And so, when we already have those inequities among property classes and the people that are paying them, if we go this direction, doesn’t this essentially pile on to the inequity?”

“I don’t know that it piles on because we are limiting their increase, but you’re right, this does not provide additional relief to the ag assessed properties,” Louser responded. He noted going down the road of eliminating the 60 mills on all property would raise the state’s cost to $757 million in the 2025-27 biennium.

Representatives from the North Dakota Council of Education Leaders, North Dakota School Board Association, Association of Counties, League of Cities and North Dakota Farm Bureau all spoke to indicate support for the concept of property tax relief and express their desires to have a voice in determining what that looks like.