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Gov. Burgum’s proposal for income tax relief appears likely

November 11, 2021 GMT

BISMARCK, N.D. (AP) — Republican Gov. Doug Burgum’s push to use some of the state treasury’s surpluses to offset income taxes appears almost certain to win legislative approval, despite initial opposition from leaders in his own party.

Representatives in the GOP-controlled House unanimously approved a bill Thursday that would provide a $350 income tax credit for each North Dakota resident filing a return for 2021 and 2022.

The second-term governor in September recommended using a portion of the state’s hefty and better-than-forecast ending fund balance of $1.1 billion in the last two-year budget cycle to provide tax relief to residents, at $500 per filer. The plan was part of Burgum’s recommendations to legislators on how to spend some $1 billion in federal aid North Dakota received this year due to the COVID-19 pandemic.

Wardner and House Majority Leader Chet Pollert said as the special session convened Monday they didn’t like the idea of tapping treasury surpluses for income tax relief. Bismarck Republican Rep. Pat Heinert then introduced the bill in the House, which got the needed two-thirds majority to be considered.

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Pollert said the vote to introduce the legislation signaled strong support for passage in his chamber.

“When you see a train coming at you, you step out the way,” Pollert said.

Wardner said he expects the bill to pass his chamber on Friday, and he likely will endorse it.

“People change their minds,” Wardner said.

Burgum last month began asking supporters to sign a petition endorsing his plan for income tax relief.

Legislative leaders considered it an end run on the Legislature and could and not recall a governor using such a tactic to garner support for an initiative.

During his State of the State address at the special session’s opening Monday, Burgum renewed his call for the legislature to provide income tax relief.

“We can afford to do it. We should want to do it. And the hardworking taxpayers of North Dakota certainly deserve it.” Burgum said.

Some lawmakers said that the move to support the governor’s plan came down to politics — and optics.

“I think we would be shooting ourselves in the foot if we don’t send some money back to citizens,” Jamestown GOP Sen. Terry Wanzek said.

Legislative budget writers estimated the loss of tax revenue at $211 million for the two years the legislation is in place.

North Dakota’s Legislature has defeated several attempts over the years to eliminate state income tax. The Legislature has raised income taxes in lean times, including during the 1980s when oil and crop prices nose-dived and left lawmakers scrambling for revenue.