Both bills — one to provide hundreds of dollars to taxpayers in North Dakota over the next two years and the other to abolish the state tax on Social Security income — were late additions to the legislature’s busy schedule, which has received broad support from the legislature. the chamber floors to be considered during the five-day special session.
A Burgum-backed tax reduction proposal, filed by Republican Representative Pat Heinert of Bismarck, would provide up to $350 in rebates for every North Dakota resident who files a 2021 and 2022 income tax return. That bill passed the Senate chamber in a 40-7 vote on Friday, Nov. 12, after unanimous support had been found in the House the day before.
With lawmakers partially reconvening to hand out $1 billion in federal coronavirus aid for a range of infrastructure, energy and higher education projects, Burgum urged lawmakers to pull some money from the state coffers and give it directly to North Dakotans. The second-term Republican debuted the idea in September and again dropped it in his State of the State address, kicking off the special session in the House on Monday.
Meanwhile, a long-discussed idea to abolish the North Dakota tax on Social Security income this week found similar traction in the conservative legislature. Minot’s proposal by Republican Senator David Hogue vacated the House unanimously Friday after passing the Senate 46-1 earlier in the week.
If Burgum signs that bill, North Dakota would become the 38th state in the nation not to tax Social Security income. Nine states have no income taxes at all, according to AARP.
Hogue’s bill would complete the work of 2019 legislation that exempted tens of thousands of people from Social Security taxes based on their income level. At a cost of $14.6 million over the next two years, the proposal will permanently eliminate taxes on the rest of North Dakotans enrolled in Social Security — about 20,000 people, according to state tax commissioner Ryan Rauschenberger.
Disabled people and individuals age 62 and older are eligible for the federally administered Social Security program.
Burgum’s shorter-term idea of extending the tax relief for two years was initially rejected by the GOP legislature’s leadership, but eventually flew through both chambers with momentum that Chet Pollert, R-Carrington, Majority Leader of the Legislature the House, compared to ‘a locomotive’.
Still, Senate leader Rich Wardner remained opposed to the proposal, arguing on the Senate floor Friday that passing tax cuts now could reduce the state’s ability to cut taxes permanently when lawmakers return to Bismarck in 2023.
“I’d like to see us plan for the future and get results” on long-term tax cuts, the senate leader said. Even with the tax cut approved, Wardner told his colleagues he will chart plans for real estate tax cuts over the next year.
The total cost of the two-year program comes in at $211 million, just over half of the government surplus from the last budget cycle.
Burgum spokesman Mike Nowatzki confirmed that the governor plans to sign the temporary tax relief. With his approval, about 300,000 workers in North Dakota will have their state income taxes completely cleared over the next two years, Rauschenberger said.
Readers can reach Forum reporter Adam Willis, a member of the US Corps, at: [email protected].