News Releases for February 2008
February 21, 2008
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Hoeven, Legislators Announce $300 Million Education Funding Reform And Property Tax Relief Plan
Reduces Average Levy By 50 Mills, Boosts State Share Of Education Costs To 66 Percent
Ed Funding Reform Property Relief Charts 
(483kb pdf)
BISMARCK, N.D. - Gov. John Hoeven today was joined by legislators in Bismarck and Fargo to announce his $300 million Education Funding Reform and Property Tax Relief Plan. The package reduces school levies by an average of 50 mills and boosts state support for schools to 66 percent of the cost of education. Joining Hoeven for the announcement in Fargo were Sen. Tim Flakoll and Rep. Kathy Hawken, and in Bismarck, Rep. Rae Ann Kelsch and Sen. Rich Wardner.
“We are addressing two critical issues with one comprehensive package,” Hoeven said. “By enhancing the state share of the cost of K-12 education, we are reducing the burden carried by local taxpayers. At the same time, we are increasing funding for quality education for our young people. Ultimately, a plan like this is made possible by a more diversified, growing economy across our state.”
Property Tax Relief
To reduce the tax burden it allocates $200 million in state funds on a per-student basis to school districts. The funds become an ongoing part of the regular per-student payment distributed through the school aid formula.
School districts receive the state funding by making an equal reduction, dollar for dollar, in the revenues collected from local property taxes. This results in an average reduction of 50 mills in the general fund mill levy of a typical North Dakota school district by the second year of the biennium.
Education Funding Reform
Sets aside an additional $100 million increase for education, pending the recommendations of the Governor’s Commission on Education Improvement.
Impact Of The $300 Million Plan On Schools
Increases the per-student payment by approximately $1000 per student per year, to a total of $5296. This represents a 59 percent increase in the per-student payment.
Boosts the state share of the cost of education to 66 percent of the non-federal cost, compared to a state share of 49 percent today.
Reduces the local share of the cost of education to 34 percent of the non-federal cost, compared to a local share of 51 percent today.
What It Means To The Average Tax Payer
The plan reduces the average general fund school levy by 27 percent, and a typical property tax statement by about 13 percent. Examples of average annual savings include:
| House valued at $100,000 | $225.00 |
| House valued at $125,000 | $281.00 |
| House valued at $150,000 | $337.00 |
| House valued at $200,000 | $450.00 |
| Average 1300 acre farm with cropland and pasture | $930.00 |
“At last we have a major proposal to dramatically increase the state’s share of the cost of education,” said Sen. Tim Flakoll. “As the state contributes $300 million more to the per-student payment, the local share of the cost will actually go down.”
“I am very pleased to know that the Governor is willing to set aside as much as $100 million for increased K-12 funding,” said Rep. Raeann Kelsch. “We need to continue the great progress we have been making in education.”
“The Governor’s proposal for $200 million in property tax relief will have a big impact on people’s tax statements,” said Sen. Rich Wardner. “This is needed right now to hold down the local assessments.”
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