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Published February 23, 2011, 07:46 PM

ND Senate Approves Dalrymple's Income Tax Measure

North Dakota GOP senators approved Gov. Jack Dalrymple's proposed $50 million state income tax cut Wednesday, a less generous plan than the tax package favored by House Republicans.

By: Associated Press,

BISMARCK, N.D. (AP) — North Dakota GOP senators approved Gov. Jack Dalrymple's proposed $50 million state income tax cut Wednesday, a less generous plan than the tax package favored by House Republicans.

The tax bill, which senators approved 37-9, would lower the state's income tax rate equally across the state's five income tax categories. It would drop the top rate from 4.86 percent to 4.65 percent and the lowest from 1.84 percent to 1.63 percent.

It would also raise the income minimum for each tax level, with the top bracket taking the biggest jump. A person would have to earn $379,150 in a year to be taxed at the top rate, up from $372,950.

"We've had a tax policy that is predictable. It's been stable and we've been consistent. The private sector looks at that as they make their investments," said Sen. Dwight Cook, R-Mandan, the bill's sponsor and chairman of the Senate Finance and Taxation Committee.

Sen. Jim Dotzenrod, D-Wyndmere, opposed the bill during a brief Senate debate Wednesday, saying that North Dakota's income tax is relatively low and that the people he represents would prefer greater state spending on road repairs.

"There is one major priority that I believe is not getting adequate funding, and that is roads, particularly county and township roads," Dotzenrod said. "What I have been hearing from my district is, roads first, tax cuts second."

Senate Democrats said they're wary of making permanent income tax cuts, saying rates could be difficult to increase in the future when North Dakota's budget surplus may have diminished.

Democrats have drafted an alternative proposal that offers $46 million in income tax credits to taxpayers over one year. They have not been able to introduce it because the Legislature's bill introduction deadlines have passed, and Republican-controlled committees that review delayed bills have blocked the proposal in the House and Senate.

Senate Democrats did not attempt to attach the proposal to Dalrymple's tax measure on Wednesday.

"It probably wouldn't get adopted because we're in a partisan environment and don't have the votes," Dotzenrod said. "But it can be a preferable bill for people who don't want to permanently cut tax rates, but want to return some money."

House Republicans have already approved separate bills to cut individual income taxes by $100 million and corporate taxes by $50 million. Senators will review the proposals later in the Legislature.

Dalrymple did not include a corporate income tax cut in his spending recommendations to the Legislature, and Sen. Mac Schneider, D-Grand Forks, the Senate's assistant minority leader, said they were unnecessary.

"Our plan provides direct relief to every North Dakota taxpayer," Schneider said. "Their plan to cut taxes for corporations, that's going to provide a lot of relief to out-of-state corporations who, quite frankly, aren't even asking for it."

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The Senate income-tax cut measure is SB2178.

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