Priorities
GROWING OUR ECONOMY
We have put in place meaningful economic development tools and programs, including important tax incentives, to enhance our state’s positive business climate. These efforts – these programs – have allowed our state’s businesses and key industries – renewable and traditional energy, advanced manufacturing, telecommunications, value added agriculture, and tourism – to grow and prosper. These initiatives are creating more, good paying jobs, higher wages, and generating new wealth right here in North Dakota.
Going forward we need to continue:
• Working to create the kind of tax structure and business climate that allows our businesses and industries to grow and prosper to even higher levels of success; and
• Working to make North Dakota the best place in the country to work, to do business, and to raise a family.
FUNDING & SAVING FOR THE FUTURE
While other states are having to cut critical programs and eliminate vital services and bond and borrow their way further into debt, North Dakota has had the opportunity to make key investments in infrastructure and fund priority areas like education along with programs for our children and seniors, while still spending within its means, and set aside a healthy reserve of over $700 million for the future.
Going forward we need to continue:
• Funding priority areas and spending within our means. This may mean holding the line on spending in certain areas over the course of the next biennium. While we need to fund priority areas we also need to resist the urge to grow government.
TAX RELIEF
In the past four and half years we have delivered a total of a half billion in tax relief to the people of North Dakota.
$100 million property tax relief program that benefited homeowners, farmers and ranchers, and small businesses across the state for 2007 and 2008.
And, another $400 million in broad based tax relief was approved in 2009.
• $100 million in income tax relief to our families and small businesses; and
• $295 million in property tax relief for homeowners, businesses, and our farmers and ranchers.
• For the average farmer and rancher, it has meant about $1,200 of savings in property taxes.
• For the average small business, it has meant about $1,800 of savings in property taxes.
• For the average family making between $60,000 and $80,000 with a $150,000 home, it has meant between $600 and $700 in savings in property and income taxes.
And, in 2009, we set aside $295 million in reserve to fund property tax relief through the next biennium to make it sustainable into the future.
Going forward we need to continue:
• Working to sustain the historic tax relief we have worked so hard to put in place since I became tax commissioner.
EFFICIENT & EFFECTIVE TAX ADMINISTRATION
We completed the successful integration of the Tax Department’s tax system on time and under budget, realizing a $2.8 million savings of the $14 million authorized by the legislature. That is a savings of 20%. This kind of success is unheard of in the area of large scale IT projects. The system is working well and has already resulted in a revenue enhancement to the state of nearly $10 million. So, not only is the system helping manage tax collections more efficiently and effectively, it is paying for itself.
Resisting the urge to grow the agency and state government, the Tax Department has been able to sustain itself with reduced staffing levels during a time when the agency has been required to do more and collect more revenue.
Increased efficiencies through technological advancements and best management practices, has allowed the Tax Department to significantly reduce its cost to collect revenue. Adjusting for inflation, it cost the department $15.89 to collect $1,000 in 1992. Today, to collect that same amount, it only costs $4.72. This translates into a reduction of $11.17, or a 70% increase in efficiency, during that period of time.
The Tax Department has turned back nearly $2 million to the general fund due to responsible fiscal management since 2005.
With the recent round of income tax relief, the Tax Department was able to simplify North Dakota’s tax system, as well, eliminating the confusing ND-2 form from our individual income tax system that only two percent of North Dakota taxpayers used and reduce the number of brackets in our business income tax, making it easier for our citizens and businesses to file and comply with the law.
And finally, the Tax Department is continually increasing availability and access to electronic filing for our taxpayers and businesses. All of the major tax types that the department administers can now be filed electronically, representing over 90% of the returns that are filed with the agency.
Last year alone, during the 2009 filing season, nearly 65 percent, more than 222,000, individual income tax returns were filed electronically. That represents 2/3 of our total individual income tax filers and a 50% increase in E-file since 2005.
But that’s still not enough and so we developed additional tools for individual filers for the 2010 filing season, including an easy-to-use portal on our website, which has been nationally recognized, which leads taxpayer to their best electronic filing option, including a number of free filing options offered through the Free File Alliance and our department. Today, nearly 75% of our individual income tax filers are filing electronically. And, we have been able to accomplish this without mandates on our preparers and taxpayers and without competing with the private sector.
Going forward we need to continue:
• Simplifying our tax system, expanding electronic filing options for North Dakotans, making it even easier for our taxpayers and businesses to comply with the law.
• Making the North Dakota Tax Department one of the most efficient and cost effective agencies in state government.
