Tax bill could hit ND state revenues, tax commissioner says
BISMARCK — North Dakota's tax commissioner predicted Thursday, Dec. 7, state revenues would take a hit under Republican tax overhaul efforts moving through Congress, but his office is still analyzing the legislation's effects.
The Senate voted Wednesday to move into a conference committee with the House to work out differences in the legislation each chamber has already passed. Republican lawmakers hope to get a bill to President Donald Trump by Christmas.
State Tax Commissioner Ryan Rauschenberger, a Republican, said Thursday an analysis of state revenue effects may not be available until next week. He said his office is working to "narrow (it) down to a number to see whether or not it has a big enough impact to warrant any kind of legislation."
Rauschenberger noted congressional lawmakers are looking to roughly double the standard deduction, which more than 80 percent of North Dakota income tax filers use.
"Based on some early, quick analysis we believe that we will see some revenue reduction," he said. "At the state level, we could see some reduced revenue because we have so many people taking the standard deduction, and that's doubling."
But Rauschenberger said the standard deduction is one variable in the overall tax plan, warranting further study of its impact.
Mandan Republican Sen. Dwight Cook, chairman of the Senate Finance and Taxation Committee, raised the "remote chance" of returning to the Capitol early for a legislative fix. If legislators decide to make adjustments, Rauschenberger said it may involve some "tweaks."
"Every state has the ability to go in and just adjust where they start their calculations of income for tax purposes," he said.
Allen Knudson, a budget analyst and auditor for Legislative Council, said they didn't have any research into the legislation's effect on state revenues. Outgoing Office of Management and Budget Director Pam Sharp said her agency hasn't examined the subject.
Sen. Erin Oban, D-Bismarck, worried that state leaders were rushing to support the Republican tax plan without knowing more about its effects.
"I'm not sure that without an economic analysis of how this is going to impact our state, that that's a position they should be taking in their roles," she said.
Rauschenberger, along with Gov. Doug Burgum and the chairmen of the Legislature's finance committees, all Republicans, signed a letter late last month signaling their support for the "tax reform efforts currently underway in Congress." Burgum also signed a letter with 20 other Republican governors Thursday pushing for "meaningful tax reform."
But Burgum's spokesman Mike Nowatzki said any state revenue effects will be a factor in the governor's decision to support a final bill.
"He hasn't endorsed one bill over the other," Nowatzki said. "He supports the overall effort in Congress to produce a tax reform bill."
North Dakota's congressional delegation remains split on the tax reform debate, with Democratic Sen. Heidi Heitkamp voting against the Senate bill's passage early Saturday. She argued it favors the wealthy and will cause the the country's deficit to balloon.
Sen. John Hoeven and Rep. Kevin Cramer, both Republicans, support the plan. They argue it would grow the economy and boost middle class taxpayers.
"I still absolutely believe the federal tax reform effort is a good one," Rauschenberger said. "I think it's going to put more money back into the hands of people."