Armstrong Property Tax Proposal Introduced with Support of Legislative Leaders

Gov. Kelly Armstrong delivers the State of the State address Jan. 7, 2025. (Kyle Martin/For the North Dakota Monitor)

(North Dakota Monitor) – A proposal for property tax reform unveiled this week by Gov. Kelly Armstrong appears to have strong support from legislative leaders.

House Bill 1176, filed Thursday, contains the proposal introduced by Armstrong during his State of the State address. The bill would increase the primary residence tax credit and put most homeowners on a path toward zero property taxes within a decade. It also would set a 3% annual cap on local property tax budgets.

The prime sponsor is Rep. Mike Nathe, R-Bismarck, who serves on House Appropriations. Co-sponsors include House Majority Leader Mike Lefor, R-Dickinson, Senate Majority Leader David Hogue, R-Minot, as well as the chairs of each chamber’s taxation and appropriations committees.

Armstrong has tasked lawmakers with making property tax reform their top priority. Although a citizen-initiated ballot measure on property tax failed in November, voters have continued to call for property tax relief.

The proposal would increase the primary residence credit from $500 per year to up to $1,550 per year for the 2025-27 biennium. The estimated cost is $483 million, with $310 million coming from the state’s general fund and $173 million coming from Legacy Fund earnings.

Over time, the program would rely less on the general fund and eventually be paid for by earnings from the Legacy Fund, Armstrong said this week. The Legacy Fund, which is fueled by oil and gas tax revenue, was valued at more than $11 billion last October.

The cap on local government budgets, expected to see opposition from political subdivisions, includes a caveat that allows them to carry over unused increases.

The bill has its first hearing at 9 a.m. Tuesday in the House Finance and Taxation Committee in Room 327E in the judicial wing of the Capitol. Written testimony can be submitted through the legislative website until 8 a.m. Tuesday.