North Dakota Senate Bill SB2378

North Dakota 2025-2026 Regular Session

• Introduced: 1/27/25
• Refer: 1/27/25
• Report DNP: 2/18/25

Caption

A BILL for an Act to create and enact a new section to chapter 57-15 of the North Dakota Century Code, relating to limitations on taxing district budgets without voter approval; and to provide an effective date.

Summary

SB 2378 would place a new cap on the annual growth of budgets for North Dakota taxing districts, including cities, counties, and other political subdivisions with taxing authority. Under the bill, a taxing district generally could not adopt a final budget that exceeds the prior year’s final budget by more than the consumer price index for the Midwest region, with adjustments made for changes in taxable property, exemptions, and temporary voter-approved or state-authorized mill levies. If a taxing district wanted to exceed that inflation-based limit, it could do so only if voters approved a ballot measure by a two-thirds majority at a statewide primary or general election. The approval would apply for only one taxable year at a time. The bill also states that home rule cities and counties could not override or modify these limits, and it would take effect for taxable years beginning after December 31, 2024.

Impact

The bill would amend North Dakota Century Code chapter 57-15 by creating a statewide budget-growth limit for taxing districts and by restricting local authority to exceed that limit without voter approval. It would affect the budgeting process for all political subdivisions empowered to levy taxes, including cities, counties, and other taxing districts, and would supersede any unused levy authority or home rule provisions that might otherwise allow higher budgets. The measure would also require budget calculations to account for changes in taxable property, exemptions, and temporary levy changes when determining the allowable increase.

Sentiment

The bill appears to have been framed as a taxpayer-limitation measure, with its core policy goal being to restrain growth in local government budgets unless voters agree otherwise. However, the recorded vote shows it failed on Senate second reading by a wide margin, 16 yeas to 31 nays, indicating limited support in the chamber. No committee transcript was provided, so the available record suggests the bill was controversial and did not gain sufficient legislative backing.

Contention

The main point of contention is the bill’s strict cap on local budget growth and its requirement for a two-thirds voter approval threshold to exceed that cap. Supporters would likely view the measure as a check on property tax growth and local spending, while opponents would likely object that it constrains local governments’ ability to respond to inflation, service demands, and changing tax bases. Another likely dispute is the bill’s override of home rule authority, which limits city and county flexibility even where local governance powers might otherwise apply.