By: Michael Achterling (North Dakota Monitor)
The Senate defeated a bill Thursday that would have expanded income tax cuts to more North Dakotans.
Senate Bill 2093, unanimously adopted by the Senate in January, initially sought to provide an income tax exemption on law enforcement retirement benefits for surviving spouses.
The House amended the bill to increase the number of taxpayers who pay zero income tax, expanding income tax cuts lawmakers approved two years ago. The proposal sought to add about 9,500 more taxpayers to the zero tax bracket, estimated to cost about $20 million for 2025-27.
Rep. Jared Hagert, R-Emerado, a member of the bill’s conference committee, said House lawmakers have always been “steadfast” on reducing income tax for North Dakotans.
“The best way to provide relief to North Dakotans is to not take it out of their pocket in the first place,” Hagert said.
But Sen. Dean Rummel, R-Dickinson, also a member of the conference committee, urged senators to vote no. He said the Senate’s position on the conference committee was that no one is asking for a reduction in state income taxes.
“We all know the demand is for more property tax relief,” he said.
Rummel also raised concerns about the affordability of further income tax cuts.
“There are so many concerns that we express, like the impact on the national and state economy with our current administration, the price of oil and the state’s reliance on carbon fuels,” Rummel said. “There’s also talk of a possible recession.”
Sen. Scott Meyer, R-Grand Forks, said he supports cutting income taxes as a way to recruit businesses and investment to the state.
“This is a small step toward the goal of eventually becoming a no income tax state,” Meyer said.
Senate members voted against the bill with a 35-11 vote.
Sen. Diane Larson, R-Bismarck, chief sponsor of the bill, said the Senate had already rejected a previous bill that reduced income taxes.
“So they amended that bill into this bill because they saw this as a good bill that maybe could get their bill across the line,” Larson said. “This is the kind of thing that I think is extremely frustrating, not only for the public, but for other lawmakers like me, too.”
Larson said she’s disappointed that widows and widowers of retired law enforcement will not see the income tax exemption she proposed, but hopes lawmakers will revisit it next session.
In 2023, North Dakota lawmakers eliminated state income taxes for lower earners and reduced tax rates for higher earners. Legislators continue to debate expanding a property tax credit for primary residences in the final days of the session.
