David Brancaccio: It's election day in North Dakota, where the turnout is expected to be heavy. Among the items on the ballot bringing people to the polls is a proposal to wipe out the state's property tax. If it passes, it would be a first in the nation.
Josh Fershee is a professor of law at the University of North Dakota. Professor, thanks for joining us.
Josh Fershee: Happy to join you.
Brancaccio: Help me understand how this would work. Eliminate the state property tax in that state means maybe $1 billion disappears in a relatively small overall state budget. So what's the plan to deal with what would be the missing money?
Fershee: Well, that's actually one of the big questions. The idea is to eliminate the taxes, figure out how to deal with the shortfall later. That's actually one of the main criticisms with the proposal. The oil boom that we've had in North Dakota has created a large amount of government funding, and so there's a lot of money in the state. And the state is holding some of that as tax revenues from the oil companies, and I think one of the ideas, even though the proposal doesn't suggest that it would actually happen, is that that money could be used to cover any of the shortfalls that they deem necessary.
Brancaccio: Is there any sense that the money available from that boom in fossil fuels in that western part of the state could actually make up for a missing property tax?
Fershee: Well, there is an awful lot of money there, and of course, any sort of fossil fuel tax is limited. There is an end time, so that revenue at some point will certainly go away. The state has been running as much as a $1 billion budget surplus, even through 2007 to 2008, and with 600,000 people here, you can imagine that translates into a lot of money per person. But no, there's no real comfort level with the fact that there's such a big shortfall. I think that's why you see employee unions siding with the Chamber of Commerce and changing with other farm groups and most elected officials coming out against the proposal.
Brancaccio: Josh Fershee, professor of law at the University of North Dakota, thank you very much for this.
Fershee: I'm glad to help.