City testifies against tax exemption bill
Last week, members of the City of Mandan staff, along with the Bismarck-Mandan Development Association and the Economic Development Association of North Dakota, testified before the Senate Finance and Taxation Committee against SB 2314, which would essentially disallow property tax exemptions for retail activities.
The bill was sponsored by Senator Tony Grinberg, Fargo, who drafted the bill and testified in its favor. The basis of the bill was to limit property tax exemption essentially to projects which are new wealth generators. The argument being advanced by the proponents of the bill is that primary sector projects generate new wealth which is a growth stimulant and retail projects consume that wealth.
The retail project that caused Grinberg to draft SB 2314 was the Mandan Walmart project, which the city of Mandan gave two years of 100 percent property tax exemption.
As others who testified against the bill stated in the case of the Mandan Walmart project, several unique things happened in response to that project. First, although the Walmart project is a big box retail facility, it also set the stage for a continuing development of other new professional, retail and commercial development in the same area of northwest Mandan. The total property tax exemption given by Mandan was approximately $400,000 for two years. This will in turn result in the city getting $200,000 of new property tax off the project for years into the future. In addition, the city will collect an estimated $400,000 a year in new sales tax from the Walmart annual sales. This means a total of $600,000 in taxes in the city of Mandan each year in the future.