For all the talk in North Dakota about reforming and reducing property taxes, one area that is not getting enough attention is the way in which local governments abuse their power to give special tax breaks to a select few under state programs that allow them to do so.
In Bismarck, one such case is sure to raise the level of awareness by the public and legislators if it gets final approval from the city commission.
According to the Bismarck Tribune, Bismarck’s Renaissance Zone Authority has approved tax breaks for buyers of condos in downtown Bismarck which cost upwards of half million dollars each.
“If you’re buying a $500,000 condo, all of a sudden you have $450,000, $425,000 in it because of tax savings,” he said.
Renaissance benefits have been approved for the entire building. Each tenant and resident in the building is also eligible for their own benefits.
Pine has sold four of the 17 condos, including one to Bill Cleary. Cleary was unanimously approved Tuesday for $25,000 in property and personal income tax benefits over five years. The Renaissance Zone Authority’s approval recommendation will have to be confirmed by the city and the state to take effect.
With high-end granite countertops, cabinetry, sound systems, walk-in showers and Jacuzzi tubs in each unit, the investment comes out to around $425,000 to buy one of the condos. Pine said it comes out to about $240 per square foot.
I have had dozens of conversations with legislators over the years about these exemptions, the original intent was to incentivize developers to refurbish old, worn-down buildings and bring new businesses into downtowns. This particular project, as those in Bismarck know, was a brand-new multi-million dollar building. These sorts of condos are well out of the reach of the average citizen, and providing tax breaks to make it easier for developers to sell them was not the intent of the these laws.
During the 2013 Legislative Session, in response to local governments like Mandan abusing their power to grant exemptions to retailers like Walmart, required that smaller towns looking to use tax incentives to attract retail businesses to their areas get permission from their voters first.
Senate Bill 2314 was a small first step to reforming local discriminatory tax exemption powers, this action by Bismarck warrants immediate attention by the legislature.
Everyone deserves lower taxes, and tax laws must apply to everyone equally.
Cities should not be in a position to grant tax breaks because there are well known and well connected developers, engineering firms, architects, investors, or construction firms involved.
When some select few residents get a tax break, it means that all the rest of the taxpayers end up paying more than they should. That is part of why property taxes keep going up, and an area where local government has done everything it can to counter-act the efforts of the legislature on property taxes.
Bismarck residents need to know their city is doing what it can to minimize property taxes to them. Granting these exemptions would show that Bismarck has no interest in minimizing property taxes, except for a select few.
