06/07/2012 05:06 pm ET Updated Jun 07, 2012

Measure 2: North Dakota Voters To Decide Fate Of Property Taxes

Voters in North Dakota will decide Tuesday whether to continue using property taxes to fund local governments or to instead use oil funds to bolster municipal coffers.

The state's Measure 2 -- one of four statewide referendums voters face Tuesday -- would eliminate property taxes in the state and give state government the power to fund local and county governments. The move has pitted conservative leaders -- who said the move would provide more local control -- against establishment figures, who said it would shift power away from local entities and possibly put lives at risk.

"For the past eight years, the power elite in our state has demonstrated a blindness to the disaster property taxes create," Charlene Nelson, the chair of Empower the Taxpayer, the pro-Measure 2 group, told HuffPost. "Since they have been unwilling to address property taxes, here we are."

Nelson, who also chairs the state's Constitution Party, said that inaction by state legislators in 2009 and 2011 on property tax reduction led her and other activists to force the statewide referendum. She said that with the oil boom in western North Dakota, which has left the state with unprecedented surpluses, it is now time to address new funding for the state. She said that under her group's plan, local governments would instead be funded by the state's income and sales taxes.

Nelson argues that cutting property taxes won't mean cutting local services, since part of the referendum says all legal services have to be fully funded, including police, fire, parks, public works and schools. The money would then be distributed to county and town governments by the state legislature, and they would be charged with developing a formula for deciding how much each town receives.

The block grant system Nelson's pushing would give more control to local government by allowing local officials to decide how much to give to each service, she said. Under the present system, state officials assess each service in a community and delegate funds by service.

Opponents of Measure 2 say that Nelson's plan won't work, noting that there are questions over what is defined as a legal obligation of local government. Bismarck City Commissioner Josh Askvig, who is also advocacy director for the state's AARP affiliate, said under one definition, the only law enforcement required in the state would be one sheriff per county.

AARP, along with other groups, including the state's teachers union and local officials, have formed Keep It Local North Dakota, the leading anti-Measure 2 group.

Askvig challenged Nelson's local control argument.

"They are trying a one-size-fits-all solution," Askvig told HuffPost. "Do you want those decisions made by the state legislature? Do you think your friends and neighbors should make those decisions? It does not make sense. How does giving up the purse strings give you more authority?"

Askvig said that state legislators have been passing new property tax relief measures and have been studying the issue ahead of the 2013 biennial session. Among the issues that have passed are caps to portions of the property tax bill.

Measure 2 supporters posted a video of former Gov. Ed Schafer (R) on their website saying that the state could afford to fund local services. Schafer, a former U.S. agriculture secretary who has not endorsed Measure 2, said that the state has set aside $400 million for property tax relief and could use existing tax revenue for local governments. He said income and sales taxes would not need to increase.

"Revenues to lawmakers are like morphine to drug addicts," said Schafer.

Nelson said she believes the passage of the measure -- which has been trailing in the polls -- would be an economic boom to the state. The state needs to diversify its economic base past agriculture and energy production, she said.

"(Agriculture and energy) are very volatile. They are at the mercy of market forces. Let's make the entire state an economic development zone."

Askvig, who oversees public works and engineering in Bismarck, questioned Nelson's economic development logic. He said that from his work in city government he hears that infrastructure is important to businesses.

"Who knows how we will fund public improvements with Measure 2," he said.