North Dakota Votes Against Abolishing Property Tax

Creatas/Thinkstock(BISMARCK, N.D.) -- North Dakotans took their angst against property taxes to the polls on Tuesday, an issue that's been gaining traction in other parts of the U.S.  Polls closed at 8 p.m. central time and results show voters ultimately rejected the constitutional amendment.

Measure 2 proposed to eliminate North Dakota's property taxes, which amount to $812 million annually, retroactive to Jan. 1 of this year.  If the measure had passed, the state would have been the first to eliminate local property taxes, the mainstay of cities and towns.

"People shouldn't have their homes held hostage," said Charlene Nelson, 52, chairwoman of the organized effort behind Measure 2, Empower the Taxpayer.  "The state has more than enough revenue to pay for K through 12 education as well as government services without kicking people out of their homes."

The issue of increasing property taxes is contentious in many parts of the country as local governments tried to raise additional revenue during the downturn.  The National Taxpayers Union reported 30 percent of properties in the U.S. are assessed at higher values than they are worth.  Counties in New York and New Jersey have the 14 highest median real estate taxes paid in the country.

The debate on lowering or eliminating property taxes has gained traction in states like Pennsylvania, North Carolina and Texas.

Nelson said her group and state legislators considered reforming property tax policy, including mimicking California's Proposition 13, which decreased property taxes.  Nelson also supported a bill in 2009 that ultimately failed.

"Every solution we looked at only created more inequity, created more confusion and complication and didn't address so the fundamental core issue of property taxes," she said.  "The issue of a property tax really was unfixable."

Nelson said the state has "more than enough" money with its $5 billion state surplus without the additional revenue from property taxes.  She said there are better ways to fund local governments.

"It all comes out of taxpayers' pockets -- right or left.  The question is should our homes be at risk, and we say they shouldn't," Nelson said.

The measure stated that property taxes must be replaced with revenue from state sales taxes, individual and corporate income taxes, oil and gas production, tobacco taxes, lottery revenue and other sources.

Groups like the North Dakota Chamber of Commerce opposed the measure, calling it "draconian" and "ill-advised."

Copyright 2012 ABC News Radio

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