Tomorrow voters in North Dakota will have a chance to replace property taxes across the state with state grants to local governments. Voters should take a deep breath and vote no. Fortunately, it seems a strong majority of voters will do so. Not surprisingly, conservative icon Rush Limbaugh disagrees. He claims the citizenry’s reluctance to eliminate property taxes is evidence of liberal brainwashing. Unfortunately Mr. Limbaugh’s fealty to sound principles has caused him to overlook three negative side-effects such an amendment could precipitate.
First, although the state would be legally unable to put preconditions on the use of grant money, it could legislatively remove a traditionally local tasks from the authority of local leaders. Thus the state would effectively restrict the possible uses for grant money without ever putting a precondition on it.
Second, the contents of local coffers would most likely fluctuate according to the economy of North Dakota as a whole. Worse yet, local governments will find it difficult to reap the full benefits of a booming local economy. Instead, local planning will be guided by metric-driven state largess. One might, with a semblance of reason, suggest many localities will understand more fully that famous slogan “from each according to his ability, to each according to his need.”
Third, proud North Dakotans won’t be able to vote with their feet. In most states, tax-adverse citizens can move to unincorporated areas where fewer services are offered, and less revenue is collected. If this amendment passes, tax-conscious North Dakotans will have no escape. State legislators, hell bent on making the cities, towns, and suburbs happy, can be expected to levy taxes and fees on all citizens; residents of outlying areas will be left with the short straw.
In conclusion, better alternatives exist. The state could, for example, require economically healthy localities to refund excess property tax revenues. Or, startlingly enough, local voters could chose to cut property tax rates at the ballot box! In the end, regardless of the solution, the lesson remains the same: blind adherence to principle can sometimes lead to unwise decision making. Hopefully Americans, and North Dakotans in particular, will take that lesson to heart.