Property Tax Increase

[guywhofishes]

 

[tikkalover]

So property taxes are going up 20-30% in Ward County? When is the next election? This must be stopped. There is no reason why taxes should go up over 5% with a absolute limit of 10%.

Ha ha, you go to the city council meetings and tell them that, you will get the same answer as the rest have gotten, which is "We all need to sacrifice somewhere". The city of Minot has already lost $2 million of the Oil Impact Money from the state this year, and the city manager was quoted on the news with this reply "The citizens and business owners will have to make up the difference". There is no cutting back expected with this city government. They will be going ahead with the flood protection project regardless if they have the $ or not. They don't even know if they will get funding to do it, at an estimated cost of $1 billion. On a $200,000 house the tax increase is expected to be around $650.00 a year. I could go on and on but I wont. I haven't received our new tax statement in the mail yet, maybe they are waiting until after Christmas to send them out.

 

[Reprobait]

Up 14.5 percent plus a small special. There is a note in there about the state taking over social service funding from the counties. However, the county was the largest increase.

 

[eyexer]

Was curious so I went and checked my tax statements. Have a house in town and a lake home. Taxes on both went down as far as total tax. Values stayed the same and mill levies were virtually identical to the past. Will pay a little more because 12% that the state paid isn no longer being picked up by the state but no increase overall. If I have to blame anyone I can blame the state but I knew that payment wasn't going to continue forever. Own land in 2 counties, not because there are lots of acres but because the land borders both counties. Taxes did not go up in either county, nor did the valuation. And again, my bill is slightly more because of the 12% deal with the state.

Total increase for me wouldn't pay the bill if I were to spend the weekend in Fargo with my wife to watch the Bison move on to the National Championship in Frisco. The counties schools, and city where I live have not been steadily increasing the taxes in leaps and bounds.

Quite honestly the federal income tax takes a bigger bite than the other taxes.

One solution might be to pay property taxes monthly, like most of your other payments. Total is the same but you don't get that big bill all at once. Kind of like "would you buy that boat if your payment was annual in January?" Monthly it's not so bad as most people are paid either monthly or more likely twice a month.

you referring to just dirt or does that land have homes in both counties

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finally got my tax statement yesterday. Total valuation on my home went down $54,000 due to the market drop here out west. But my taxes still went up $48 lol.

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Does anybody have any numbers on how many billions we have horded away in all the various special funds they have set up? Seems that has been lost in the shuffle or they refuse to talk about it.

 

[deactivated]

you referring to just dirt or does that land have homes in both counties

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finally got my tax statement yesterday. Total valuation on my home went down $54,000 due to the market drop here out west. But my taxes still went up $48 lol.

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Does anybody have any numbers on how many billions we have horded away in all the various special funds they have set up? Seems that has been lost in the shuffle or they refuse to talk about it.

I bet you cannot calculate the savings because of the lower evaluation then take into account the 12% increase do to the state not buying down taxes.

 

[Allen]

My post was regarding your redistribution of wealth comment. If the taxes weren’t withheld, how would they collect the taxes on mineral owners who live out of state? There are A LOT of out of state mineral owners and a fair amount of ”unlocatable” mineral owners whose royalty money is held in suspense.

Should locals who have no mineral interest foot the bill to repair roads, hiring necessary county employees to deal with population influx, pay for spill cleanup etc.? The counties impacted by oil production get a big chunk of that money. Maybe I’m misunderstanding where you are coming from as far as you saying it’s a redistribution of wealth. How do you think the royalties should be taxed? Or do you think they shouldn’t be taxed or maybe you don’t think the counties outside of the oil producing counties should get any money? I am by no means an oil and gas tax expert and I’m not attacking you, just curious.

Your original post said mineral owners don't pay P&E taxes. They do, hence your original post was just wrong. Production and extraction taxes going to support the mineral development is not something that I think many mineral owners have a problem with in general. Using that money to pay for a state-wide property tax buy-down is nothing short of redistribution of wealth. That's what it's called when you take from one and give to another, it's a redistribution.

On top of the P&E taxes, mineral owners also pay state and federal income taxes. In short, they are getting taxed at something close to 50% overall depending on their marginal tax brackets because of the source of the income itself. Be careful about being OK with such a taxation system. I simply have issues with one form of income being subjected to a different taxation scheme than another. And you should too. Some day, down the road, the tax man may come for your income as well when this cash cow has been milked to death.

 

[Trip McNeely]

and on the flip side allen, property owners shouldnt be taxed to build infrustructure that is "needed" because of the oil..... roads, police, new schools wouldnt be needed if we didnt have an oil boom..... last i checked no other industry had brought as big of strain on the resources in this state as oil.

 

[eyexer]

I bet you cannot calculate the savings because of the lower evaluation then take into account the 12% increase do to the state not buying down taxes.

mine still shows total legislative tax relief like it has for the past few years. So that buy down is obviously still in this statement.

 

[deactivated]

mine still shows total legislative tax relief like it has for the past few years. So that buy down is obviously still in this statement.

What is the mill levy from last year and this year?

 

[Obi-Wan]

In my opinion the mineral rights should never been allowed to be severed from the surface owner

Your original post said mineral owners don't pay P&E taxes. They do, hence your original post was just wrong. Production and extraction taxes going to support the mineral development is not something that I think many mineral owners have a problem with in general. Using that money to pay for a state-wide property tax buy-down is nothing short of redistribution of wealth. That's what it's called when you take from one and give to another, it's a redistribution.

On top of the P&E taxes, mineral owners also pay state and federal income taxes. In short, they are getting taxed at something close to 50% overall depending on their marginal tax brackets because of the source of the income itself. Be careful about being OK with such a taxation system. I simply have issues with one form of income being subjected to a different taxation scheme than another. And you should too. Some day, down the road, the tax man may come for your income as well when this cash cow has been milked to death.

 

[Allen]

and on the flip side allen, property owners shouldnt be taxed to build infrustructure that is "needed" because of the oil..... roads, police, new schools wouldnt be needed if we didnt have an oil boom..... last i checked no other industry had brought as big of strain on the resources in this state as oil.

But you are OK with the teachers and garbage collectors being taxed to build farm to market rural roads for the farming community?

Or the farmers for being taxed to build roads into boat ramps for us anglers?

I mean, I get it, the rush to develop was dumb on so many levels that it makes my head hurt. But the increase in sales taxes, income taxes, and royalties off of State owned land all put a significant chunk of change in the State's coffers due to oil development.

Like I've said, jacking the tax burden on a few due to ????? is something I am not a fan of because it will eventually come back to haunt other people when that cash cow has its teats wore out. I don't think it's quite accurate to say that property owners don't benefit from the oil development in western ND, or even quite a ways away from the actual oil fields. We have plenty of people in Bismarck that work out there and because of that they have bought homes in Bismarck, sent their kids to Bismarck schools, which employs teachers from all corners of ND that went to school at ND universities. Or for that matter, the car/boat/RV/Walmart sales in Bismarck and Minot places away from the west seem to have also boomed. Its tentacles have reached far and wide across the state in economic activity.

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In my opinion the mineral rights should never been allowed to be severed from the surface owner

That's an interesting point that has some merit. Do you know how/why they got severed?

One of the biggest reasons for the severing of mineral rights from surface owners came via the dirty 30s. The State legislature, being fairly ag friendly, wanted to help keep farmers on the land. So when farmers and ranchers ran into difficult financial times and banks were charging too high of an interest rate (subjective for sure), the legislature swung a deal where the State would provide lower interest operating loans. The catch here is that most knew the deal was going to cost the state money in the form of defaults. So in order to help it be not a solely one-way handout, the State took what everyone generally considered the "worthless" mineral rights as payment in buying down the interest rates. This seems to have started the generally accepted practice of severing minerals from surface lands. Most farmers didn't care because, well...they're farmers, not oilmen. And since nobody had successfully drilled a well in ND at the time, they considered them worthless with the exception of the gravel.

That then led to a bunch of landowners in the 60s and 70s horse-trading fractions of minerals from under their land to their neighbor for some of the minerals under their land. Everyone was onboard with it then. Heck, lots of land sales came up where the minerals were specifically listed as available with the purchase of the land, it went something like this. For sale, 160 acres of pasture/crop land. $400 an acre with mineral rights, or $375 an acre without minerals.

It's the kids and grandkids of the people who either chose to give up their minerals to the State in the 30s or chose to buy land minus the minerals in the 60s-80s that complain the loudest about minerals being separated. Tough to shove that genie back in the bottle now but the State gave surface landowners a way to steal the minerals a few years back. Not sure of how successful that program has been, but it's at least legal to now steal them back if you follow the rules.

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Heck, I even know of a an old electric and gas company in rural Ward and Mountrail county that used to sign deals with landowners to provide free electricity and gas (propane??) for the farmer's land upon the death of both the husband and wife.

Man, I bet there were some pissed off kids over that! But dear old mom and dad didn't think the kids either wanted the farm, or they didn't want the kids to suffer on the farm like they did.

 

[Trip McNeely]

im not dissagreeing with you allen..... just letting the other foot hit the ground too. i not against taxes or prorperty taxes but our leaders got carried away with spending. now its coming back on the property owners.

 

[Marbleyes]

When Allen says it is legal to steal back the minerals, what he is talking about is called “lapsed minerals”, which means if you own minerals and you show no activity with them (simply recording a document against the lands in the courthouse in the county you have minerals in) for 20 years, the surface owner can claim them way easier than you would think. I don’t have time to get into all of it right now but it is way too easy to steal those minerals with little effort.

Short version is this: The surface owner has to make a reasonable effort to contact the mineral owner by putting it in a newspaper for 2 consecutive weeks. Problem is if you don’t live in that county or read that newspaper, you won’t see it. They also have to try to contact them by their last known address. A few years ago I was running title on some lands and saw a notice of lapse along with a judgment giving over 100 mineral acres to the surface owner. The problem was the mineral owner (a petroleum company from out of state) still had the same address that they had for decades. How can the surface owner legitimately claim they reached out to the mineral owner in that case? The reason I know their address was still the same is a few weeks after the judgment, there was what’s called a statement of claim filed against these lands that showed the mineral owner was still operating under the same name and same address.

Allen, I didn’t say I was ok with the redistribution as you call it. I just understand why it’s necessary. I own minerals (not currently under production) and also own a small working interest in over 20 wells and am self employed so I think they are already coming after my income.

Also, sure some communities benefitted from the oil boom but if you lived in Williston for example, your home values shot through the roof and your property tax went way up. Not to mention the cost of living got crazy expensive for a lot of people. I know I was paying $5800 a month for an extended stay hotel that I only used Monday through Thursday every week. I thought the production tax was like 5% and thought most of that money stayed in the county the oil was extracted from. Again, with there being so many out of state mineral owners and the state of ND being the biggest mineral owner and being exempt from the production tax, I understand why I’d be pissed if I lived in one of those counties and had to foot the bill by my property taxes going through the roof, cost of living skyrocketing and having to deal with shitty roads and not having enough infrastructure to accommodate the huge influx of people coming to work the boom. The majority of people I know that came up here for the boom didn’t pay income tax here because they weren’t considered residents. Maybe I am wrong but that’s how I understood it.

 

[Allen]

I am a little out of my league on income taxes, but I thought for sure you paid income tax to the state in which it was earned. shorthairs can probably correct me if I'm wrong on that. The caveat though to that is that if you were coming here only to work from a state like Minnetucky that has a higher state income tax, they would also expect you to pay the difference between their higher tax and our lower tax to them.

Like I've said, I get the frustration with everything out west. I really do, it sucked for the long-time residents of Williston unless they found a way to profit from it all. Same is true for my hometown of New Town.

I just really think a lot of this could have been avoided with some sort of a cap on the number of wells permitted each year. Not sure what that number would have been, but something that wouldn't have pushed the infrastructure to the breaking point would have been nice.

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p.s. And I know nonresidents that get royalties from North Dakota also pay ND income tax. The last legislature passed a measure requiring the company (writer of the check) to withhold ND income tax from the checks of nonresidents because there was some confusion on this and nonresidents were often including it in their tax returns to their state of residence.

I kinda wonder if it may not have started to get to a point of contention between some states.

 

[eyexer]

What is the mill levy from last year and this year?

Doesn't give the Mills for some odd reason.

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If your a non-resident they withhold ND taxes from your check. But when you pay your income taxes in your home state you can file to have your taxes that were withheld in ND given back to you. You have to show proof of taxes paid in your home state. I can't remember for sure but the state might keep 10% of it. I just don't recall anymore.

 

[Marbleyes]

There was a bill in the legislature a few years back that was going to tax mineral owners but it got shot down. I’m not 100% sure why but I would imagine partly because of the enormous nightmare that would have created. I’m guessing the 5% tax was done because it’s waaaay easier and it is done in lieu of a property tax on mineral owners. When this initially came up I was wondering how in the hell they would figure out who owns what minerals and how they were going to get ahold of them or their heirs, not to mention how they were going to enforce penalties on people who don’t live in this state or even in this country or are simply not even aware that they own minerals in the first place. There is a lot of money (I’d bet 10’s of millions) currently held in suspense by oil companies because they can’t find the mineral owners or any heirs to pay them their royalties. The state would have had to pay people who do what I do to run title on every tract of land in the state to figure it out and even then, there would have been endless lawsuits because these mineral conveyances aren’t always black and white and a lot of times are done by attorneys who have no clue what our state laws are and create a lot of ambiguity with the way some of these deeds are written. Who would foot the bill to pay people to figure this out? Keep in mind the state would have to compete with what oil companies pay for this type of work and I promise you that the residents of ND would have thrown a shit fit over that cost, and rightfully so.

 

[gst]

Well that certainly clears up a lot of questions guywhocontributesnothing. I will be sure to vote for it next time

 

[guywhofishes]

I know how much you enjoy the twist. Merry Christmas old timer.

 

[Allen]

Marbleyes, I am going to hazard a guess and say that those mineral royalties held in trust because the heirs/owners can't be found are the prime ones to get usurped by the current surface owner.

 

[gst]

I know how much you enjoy the twist. Merry Christmas old timer.

And Merry Christmas to you as well. For the record, I am more of a jitterbug/polka man .......toss in a little red eye and maybe even a jig or two.