The 2023 legislative session could be huge for North Dakota taxpayers who have long been waiting for income tax relief. Governor Doug Burgum delivered a budget address this week, calling for income tax relief and much more.

The Governor called out high inflation driven by profligate spending from Democrats in Washington for burdening North Dakotans. He also pointed to North Dakota’s continued success in energy production leading to higher-than-expected state tax revenues, saying:

“When we look at this abundance of state tax revenue, we must recognize that it comes at the expense of taxpayers who are paying more for goods and services and having to work longer hours to make ends meet. That’s why it’s so important, now more than ever, to both invest dollars wisely and quickly provide real, meaningful tax relief to all income earners.”

Specifically, Governor Burgum restated support for a plan to flatten and reduce the state income tax to 1.5%: “Every North Dakota income taxpayer will benefit from this plan, which will make North Dakota the lowest flat-tax state in the nation. This will give us an advantage as we compete against other states for workers.”

Even better news for taxpayers, the Governor advocated for eliminating the state income tax entirely, something the House has passed before but which has not gone further: “And it puts us on a path toward eventually zeroing out our individual income tax and joining the eight states that don’t have individual income tax.”

Eliminating the income tax would put North Dakota among the best states for taxpayers, making it easier to start a business and more affordable to raise a family. As the Governor correctly notes, North Dakota could better compete for residents, something that has been a challenge.

With their southern neighbor already being a no income tax state, North Dakota is even more incentivized to get these tax reform priorities done in 2023.

It is also worth highlighting the Governor’s remarks on property tax reform. Clearly, Governor Burgum has seen how attempts to bribe local governments to lower property taxes have failed, as property tax rates grow in the end and subsidies obscure the problem to voters.

The Governor said: “This Legislature, and legislatures in many other states, have tried and nearly exhausted every option to address property taxes with state subsidies and valuation caps – almost always with unintended negative consequences and disappointing results. Here in North Dakota, from 2007 to today, 17 pieces of legislation have passed resulting in $7.25 billion of property tax relief. Yet property taxes continue to rise in many communities, which reinforces the old refrain: If you want more of something, you subsidize it. And by continuing to subsidize property taxes, we’re growing local government. 

“Reducing the costs that drive up property taxes? We’re in favor of that. Subsidizing more local spending? We’re absolutely not in favor of that.” 

With a great executive budget proposal, North Dakota’s 2023 outlook for session is looking like a historic one for taxpayers.

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Public domain; 3/27/18; Defense Information Distribution Service