North Dakota will vote on whether to become America’s first state without property taxes — but here’s why this historic move could come back to haunt locals

Measure faces a long road

With the election right around the corner, voters in the traditionally conservative state are trending towards a no vote. North Dakota voters rejected a similar proposal in 2012, and the 2024 edition is facing similar voter headwinds.

A North Dakota Monitor poll from late September indicated that 40% of voters plan to vote against it, with 28% in favor — while a significant one-third remain undecided.

Opponents, including Republican Governor Doug Burgum, argue that property taxes are crucial for funding schools, emergency services, infrastructure, and other public services.

Removing this dependable revenue stream would destabilize budgets across counties and cities, potentially putting essential services at risk.

“It's complete misinformation to say that if you vote for that thing, that somehow that you're ending property taxes, you're stopping property taxes; you won't,” Burgum said at a recent gathering in the North Dakota town of Watford City.

“What you will do, is, you will cause someone else to pick up the tab, that's what this whole thing is about. It's about who's going to pay for it, it doesn't lower the cost of delivering anything in our state, it just shifts the burden to somebody else."

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How property taxes sustain communities

Property taxes are the backbone of local government funding in the U.S., underwriting everything from schools and police departments to road maintenance and fire protection.

In sparsely populated North Dakota, property tax revenue is particularly crucial, especially where alternative funding sources are scarce.

In 2023 alone, U.S. cities collected more than $363 billion in property taxes from single-family homes, marking a nearly 7% increase.

North Dakota residents pay a slightly above-average property tax rate, but significantly less than those in high-tax states like Illinois or New Jersey.

Supporters of the measure propose that the state step in to replace the lost local revenue, though details remain scarce on how these “replacement payments” would be funded or allocated.

Ideas include raising state taxes, adding new fees, or leaning more heavily on revenue from the oil and gas industry, which already plays a major role in North Dakota’s economy.

“We are such a rich state per capita that we can actually make this conversion and be able to afford it without increasing taxes and without cutting services,” Rick Becker, a former Republican state representative who's leading the measure, told The Associated Press.

North Dakota’s decision could set a precedent for other states where property tax rates have steadily increased, sparking a broader “tax revolt” movement.

With property tax burdens climbing across the nation, other states may consider similar measures if North Dakota’s gamble pays off.

If the plan backfires and leaves communities financially strained, it could serve as a cautionary tale instead.