Cut State Workers; dramatically increase Private Sector Jobs

From Eric Dondero:

Bucking a national trend, particularly in Democrat states like New York, California and Illinois, North Dakota is moving to cut its property tax through initiative.

From the North Dakota Policy Council:

If property taxes were eliminated and the state government had to fund 100% of local government revenue that is generated by property taxes, North Dakota's private sector would create nearly 12,000 new jobs in the first year and more than 13,000 new jobs by 2015. Personal income would increase a staggering $877 million in the first year and by more than $1 billion by 2015. Private investment would increase nearly $700 million in the first year and by more than $1 billion by 2015. These are good things for North Dakota's economy.

Further a study commissioned by Council, by the Massachusetts-based Beacon Hill Institute, indicated that a cut in the state work force would dramatically increase private sector employment. Continuing:

In 2009, $693,184,750.09 were collected in special taxes and property taxes. According to the Beacon Hill Institute's study, the increase in disposable income for North Dakotans and increased business activity because of that income - along with new private investment - would generate $65.88 million in new state revenue.

Simple Math - if you cut the State Work force, you don't need Revenue increases to make up a Tax Cut shortfall

Predictably, liberals in the State are framing the proposed tax cut as a loss of revenue to State coffers.

North Dakota Tax Commissioner Cory Fong is suggesting that the State will have to make up for it, with increases in other revenue sources.

Rob Port of the conservative blog Say Anything, based in ND, shoots that argument down:

flying in the face of Fong’s suggestion that other taxes in the state would have to be drastically increased to make up for the property tax is a study just released by the Beacon Hill Institute showing that if the tax were to go away the state would really only have to make up about $29 million in tax revenues. And that’s a conservative estimate. The reality is probably quite a bit less.

the state could save $25 million annually that it spends now in assessing the property tax. That combined with reductions in the state’s work force and other cuts in wasteful spending put the study’d estimate at the amount of revenue that would need to be made up through other tax increases at only $29 million (worst case scenario).