Radical Property Tax Plan Falls Short in North Dakota, Dims Chances for Pennsylvania Plan

CNN Monday reports this morning that North Dakota voters, by a wide margin, defeated a plan to end the property tax and replace school funding with oil tax dollars. Why would voters turn down the chance to have their tax bills paid by now booming oil development? It seems that, as in Pennsylvania, a significant majority of North Dakotans like having local control over schools. The North Dakota initiative would have shifted control to the state government, which collects the oil dollars.

The other reason is that North Dakotans were unwilling to trade the volitility of oil revenues for reliable, if unpopular, property taxes to fund education. Kids need schools, no matter the price of oil.

Why does this matter here? This North Dakota plan was the loose basis of House Bill 1776 in Pennsylvania, which would eliminate school property taxes and raise the sales and income tax rates, while expanding the list of items subject to sales tax. The bill was tabled by the state House Finance Committee on Monday. A success in North Dakota may have provided some extra oomph to the Pennsylvania plan, but voters in North Dakota spoke loud and clear on this one.

Like the North Dakota plan, HB 1776 would have shifted significant control over school funding to the state and increased the volitility of education dollars. Unlike the North Dakota plan, the Pennsylvania bill calls for a sales and income tax increase. Shifting taxes in that way would create winners and losers among regular people, making the Pennsylvania plan even more politically problematic than the now-rejected North Dakota proposal.

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