(patriotic music) - This is "North Dakota Legislative Review" on Prairie Public.

I'm Dave Thompson.

Thanks for joining us.

Our guest today is the House Minority Leader, Representative Zach Ista of Grand Forks.

Sir, welcome to the show.

- It's great to be back.

I think this makes the third time, and I wouldn't be much of a representative out of Grand Forks if I didn't note that makes a hat trick.

- Absolutely a hat trick for sure.

We all like the hockey games.

- We do.

- Yes.

So, let's just, for people who don't know, what is the role of the minority leader?

- Yeah, the minority leader is the caucus head for the Minority party, which in North Dakota right now is the Democratic NPL Party.

So I have a role in sort of managing floor debate, influencing what committee assignments are, caucus members had, keeping the caucus abreast on what's going on on our House floor calendar, a different scheduled of events that are coming up.

Just really sort of taking a holistic view of the legislative session.

Make sure folks are getting their question answered, being able to make sure their voices are heard, helping them navigate the process if they're new members to the legislature.

So it really adds on top of my, you know, obligations as a representative out of District 43 in Grand Forks, that extra layer of leadership, and your obligations include serving on committees, correct?

- They do.

I do serve on one committee, the House Finance and Tax Committee, like my predecessor in this role, now Senator Boche, I've elected not to serve on a Thursday and Friday committee so I can devote more time to those leadership obligations.

- Well, since you're on finance and tax, what is the big issue going on right now?

Property tax.

- Sure is.

- So reform and perhaps some rebates.

So give me your perspective on the property tax debate.

- Right, this really has dominated the time we've spent in our house taxation committee.

We've probably had upwards of 20 or 25 bills that touch on different aspects of property tax.

And the governor came with his proposal that's been put into bill form in House Bill 1176.

It was brought by, Representative Nathe out of Bismarck is the prime sponsor, and it's got support of a lot of the majority caucus leadership, and committee chairs on it as well.

You know, when I look at the property tax question, I think we've gotta do a few things.

One, is provide this immediate relief that focuses on primary homeowners.

We know, and the governor was spot on when he said this, that as you talk to people across the state, what they're asking for is relief from that primary residence bill they pay, the one we get right before Christmas every year.

You know, whether it's in your escrow, if you're still paying off your house, or that last payment you still have if you've owned your house outright for a while, it can hit hard, and it can be a surprise knowing how much your house went up in valuation.

It's a bit of a confusing formula if you don't live and breathe it every day of how they assess that tax.

So, one, let's build off what we did two years ago when everybody got a $500 credit for their primary residence.

There's a proposal to up that to at least a thousand dollars.

I think that's, that's a good start.

My Democratic colleague, Senator Tracy Potter and Senator Merrill Piepkorn proposed that idea over the last few years, and it's now sort of grown into this mainstream notion of an important part of property tax relief.

The other big part is reform.

How do we stop the bill from seeming to grow year after year after year with no end in sight?

What the governor's proposed, what I think most folks believe is coming, is some sort of cap on those local cities, counties, school districts ability to raise their tax level every year.

The way, I think the most likely way we're going to do that, is to cap the growth of their budgets.

The number 3% keeps being thrown around.

So I think at least coming outta the house, I would expect a cap somewhere in that 3% range.

And we gotta be careful about a 3% for a Cass County, or Burleigh County, and Grand Forks County, that's probably something meaningful and workable.

If you're looking at our smaller counties like Slope or Divide, that's just a few hundred dollars, or a few thousand dollars with how small some of their local budgets are.

So we're gonna have to get in the weeds a little bit, see if we get that right.

But I think that's going to be the big framework of our property tax discussion going forward, but lots of work to be done.

- The Senate Republican leader, David Hogg, has talked about Maybe it's not just a straight 3% cap.

It might be different, as you said, maybe on the size of the counties, and how each county and subdivision depends on property taxes for revenue because a county like Cass and Grand Forks, or Burleigh, has the ability to raise sales tax, and others don't.

- That's right.

I think those conversations are going to be ongoing.

Do we find some way to account for those meaningful differences from, jurisdiction to jurisdiction?

Do we index it to something like inflation instead?

A lot of the plans, including the governors, have this idea of a rollover that you could bank an increase.

So if you didn't have to increase your taxes in year one, but you needed to do it more than say 3% in year two, you'd have some carry over for, you know, whether it's three years or five years, so that you could plan long term for some of those needs that, that maybe aren't just the everyday cost of government, maybe need to build a new facility or something to that effect.

I think that's an important prong of it as well, to make sure our local governments do have that flexibility.

But I know, I know there's, there's pushback.

There's pushback from counties and cities.

I empathize with how hard it is for them to balance their budget.

It seems to me at the end of the day, this is just sort of a inherent problem of governance, Constituents, we as citizens in North Dakota want more and more services and goods from our government.

The costs have gone up and up for them, and our appetite to fund those through our taxes has gone down and down.

So how do we right size this equation?

It's kind of a constant struggle of government.

And this time I think it's going to swing in the direction of those primary homeowners are gonna get some help on their property tax bill.

And local governments are going to have to find ways to tighten their belts.

- So how can Democrats, you know, have their imprint on this debate?

- Yeah, it's important that, that we're in the room for this conversation.

You know, myself and a freshman Representative, Austin Foss who serves out in North Fargo, we both are on the House of Finance and Taxation Committee.

So we're literally there when it's happening.

The governor accredit him, he's kept myself and Senate Minority Leader Hogan, apprised of his plan, updates us regularly.

You know, I find myself being quite in support to the outlines of his plan, and sort of, I also support the way he's looking at it.

Let's make sure we're prioritizing homeowners first.

Among homeowners, let's make sure we're prioritizing those who need the relief most, those that might be on a fixed income, maybe they have a smaller home value, which might mean they have a smaller amount of disposable income.

And if in the long run we can come up with a plan that lowers the tax bill of people with higher end homes, and more desirable locations throughout the state, so be it.

But I think the governor's on the right track there.

We all wish we could go without, without putting these caps on the political subdivisions, but if we do that, all we're gonna do is put the state more and more on the hook for property taxes, and the costs are never gonna come under control on that side of the formula.

- Well, since you're on finance and tax, has there been any discussion about the income tax?

- You know, it's sort of always a specter in the House, especially.

The House of Representatives has really put its market down.

The majority caucus Republicans have on lowering the income tax, and there's many that have a very sincere belief that the best tax policy we could do is to completely eliminate that state income tax.

I would say there's a little bit of short memory there.

Last session we did a very, very substantial adjustment to the state income tax, such that about six and 10 North Dakotans don't pay any state income tax at all.

And what we're finding, is there's not a whole lot left to provide relief for, unless that relief's gonna go to some pretty, you know, high earning families across the state.

So I think it's probably time to put income tax, further income tax cuts on the back burner.

Let's be responsive to what people are telling us, is the tax that's giving 'em frustrations, making it difficult when they're setting out their family budget at the kitchen table.

And that's the property tax.

And oh by the way, let's make sure we don't let sales tax get outta control as the remedy to lost revenue to these local jurisdictions too.

- So how do you do that?

- Well, again, it comes down to this notion of caps, caps in the amount of budget increases that the locals can have.

We just heard a bill and advanced it out of the House Tax Committee this week, about local's ability to implement sales tax, whether it's a county or city, if they have home rule authority.

And, we said we're gonna cap that at 3% additional on top of the state's sales tax levy.

Now none of these jurisdictions are anywhere close to that today, but we've already seen just this past November, municipalities and counties realizing if property taxes revenue's gonna go down, they need to replace that somewhere.

So we have, you know, emergency service levies coming in or, you know, park district levies coming in.

We just wanna make sure, I think, as a legislature that we don't just transfer the problem to a different kind of tax.

And we certainly know with the sales tax, it's what tax folks would call a regress of tax, that it burdens those on the lower end of the earnings scale more because they spent a greater portion of their income on taxable goods.

- So have you talked about assessments yet, special assessments?

- Yeah, we have, we actually heard a bill in finance and tax committee this week that was initiated out of the city of Bismarck where we're at today.

And what they would like to do is have the authority under state law to, in lieu of special assessments, charge a utility fee or utility tax more broadly in the community.

You know, that was met with a fair amount of support in the committee.

I think local governments are gonna have to explain that well to their citizens.

'Cause you know, I ask questions on the committee, if I'm a renter that lives miles away from the new growth or new subdivision that would normally have the specials attached to it, is it gonna feel fair to me to have a $30 a month utility fee assessed to my light bill or my water bill when I'm not benefiting from that?

So, but I think you hit the nail on the head.

Those special assessments 'cause a whole lot of frustration.

Different jurisdictions throughout the state have used them more or less than other cities and counties.

I think up in Grand Forks, we've been a little more cautious in using them.

But you hear it, especially in West Fargo, and in the Bismarck area.

People get hit with those, and it's a bill they haven't been able to plan for or budget for, and now all of a sudden they're scrambling to make payment on it.

- Besides taxes though, what are, what are the Democrats priorities this session?

- Yeah, I think the big thing we're hearing from our constituents, we've heard in the campaign trail, you can't escape it if you're, you're paying attention to the national climate as well, is what can we do to lower the cost of living for people?

Property tax is one way, of course, that's an out-of-pocket cost we can control.

Here at the state, I think we have to have the humility to recognize we don't control a whole lot of out of pocket expenses directly.

Especially a state the size of North Dakota.

We're a relatively small player in that national economy that drives these costs.

But I think we should look at legislation when it comes to us.

Will this help?

Will this lower out out-of-pocket costs for healthcare, for taxes?

A big priority of my caucus, and not just my caucus, strong bipartisan support is the cost of school lunch and breakfast.

We know the average household that sends children to school in the state, pays about $850 a school year for school meals.

We've got bipartisan bills advancing in the House that would take that $850 off the, off the table, off the budgets of those families, and then put it onto the state and say, "We know kids learn better, "and behave better when they eat in school.

"And we know families are gonna be able "to budget for themselves better "if we can keep that $850 in their pocket.

"Let's join our neighbor in Minnesota, "other states like Colorado and New Mexico," and I think Maine, "all throughout a diverse area "of the country that has gone to this model of no cost, "healthy school meals for all students."

So that's one big priority for, myself and my colleagues too.

- So how do you, what do you think the appetite is in the legislature to do this?

- Pun intended.

(Zach laughs) - Pun intended.

Yes.

- Yes.

You know, I think there is good bipartisan support.

My friend, Republican representative, Patrick Hatlestad out Williston is the primary sponsor of host Bill 1475 that would provide school lunches.

My good friend, Representative LaurieBeth Hager out of Fargo is also the sponsor of a bill that would provide universal lunch and breakfast for all students.

If you take a look at the co-sponsors on those, you've got left, right and center, all different areas of the state represented, east, west, north, south, Indian country.

You just see a really diverse coalition coming together, along with a grassroots group called Together for School Meals.

It's made up of educators, parents, worker organizations, school nutritionists, healthcare professionals, all coming together to say, "This isn't a partisan issue."

"This isn't a hot button issue."

We know through public polling, about 80% of North Dakotans want to make this investment in our families and our kids.

So, I do think we're gonna probably hear, have hearings on these bills as soon as next week.

I think you're gonna see a lot of support.

- Sounds good.

I've been hearing that from, from both caucuses for sure.

- Absolutely.

- Wanted to ask you about childcare, because that always is an issue in terms of attracting workforce.

What's on the, what's on the table for childcare?

- Yeah, I think what's on the table for childcare is refining what we did two years ago.

We made a a pretty good down payment.

I think it could have been bigger at the time, on investments in this key piece of workforce infrastructure.

That's really what it is.

We need childcare so that moms and dads who wanna work outside the home can.

And we moved the ball forward last year.

We've had a couple of years in this interim now to assess those programs, see where we can improve them, or where we can start something new and different.

My good friend Kathy Hogan is a great leader on this.

My Grand Forks colleague, Representative O'Brien, a Republican is a big leader on this.

And you're starting to see younger and younger voices be elected to the legislature, that themselves are aren't that far removed from when they were in childcare.

And then folks like me, I have two kids under five in my family, and, you know, one of the biggest cost savers to me was when my oldest graduated from his daycare center to kindergarten this year, cut my childcare bill in half, and that accounted about a thousand dollars a month in savings.

For most working families, a thousand dollars a month, or 2000 if you have two kids, 3000 if you have three kids, that is going to drive a whole lot of people, and more often than not, women out of the workforce.

So let's keep them in there by investing in this key piece of workplace infrastructure, but also, let's make sure we're taking care of those who really make the sacrifice in their careers to be childcare providers.

The women who work in my childcare center are absolutely heroic.

They often do it for wages now that compete more like fast food, or other food service industries.

These are the first teachers, my kids and anyone's kids who go to daycare have ever had.

So let's treat them like professionals, retain them in the workforce by supporting their pay as well.

- Just to go back, just that point, Watford City treats childcare as a, as an ongoing expense, kinda like as a utility.

- [Zach] Mm-hmm.

- Is that something the state could look at?

- Yeah, it absolutely can be part of this discussion.

You know, we, we are very good at studying these models, picking best practices if a city or county is doing something better.

Just like states are sort of the laboratory Democracy in our federal system, in our federalism system, these local governments often know what works best in their communities.

Let's emulate at the state level, some of those successes.

And Watford City's been a leader on this childcare issue for years now.

- I wanna ask you about the bonding situation.

Because both Governor Burgum, and Governor Armstrong had proposed bonding.

- [Zach] Mm-hmm.

- What do you think about that?

- I would agree again with Governor Armstrong on it.

You know, he has, I think made it clear that he's generally a supporter of bonding.

And I don't think there has to be any sort of passionate ideological views about bonding.

It's a fiscal and economic tool.

Do we have a project for which it makes sense?

Do we have interest rates at which it makes sense to do the bonds at?

Does it fit into our overall fiscal portfolio in the state?

If the answer to those is "Yes."

And I think it is in some of the things that the governor has talked about, then absolutely we should do it.

We shouldn't be, you know, afraid of it and just say, "Well, we've got cash to do it.

"Let's use the cash now."

Let's make sophisticated smart financial investments.

And that could include bonding under the right conditions.

- Now prisons are under bonding, correct?

- I believe some are, and- - Yeah, some are.

- And what the governor has talked about is, he would be supportive maybe of continuing down that road, to the extent we have further investments in prisons.

- How about that entire prison issue?

It needs some upgrades, it needs some space.

What do you think?

What needs to be done?

- Right.

In 2023, we made a big down payment on a new women's facility.

And I think that was good to make as priority number one in the realm of departments, Department of Corrections and Rehabilitation.

We know the facility in New England isn't keeping up with the needs of the female inmates that are housed there.

And when it doesn't keep up with those needs, it only hurts our efforts to stop recidivism, to actually make sure you're leaving incarceration with support in place, with reformed opportunities in place.

So we're gonna finish the job on the women's prison.

I think we're going to do that.

And then we have to figure out what do we do with state male prisons that are at capacity.

And we know local jails, not just in the eastern part of the state, but all throughout the state, they're sort of bursting at the seams in many ways.

I think, you know, I'm a former prosecutor, the governor's a former defense attorney.

I think we often find ourselves sort of aligned on this, that prison for the sake of prison doesn't help anybody.

It's important.

Incapacitating people who have committed offenses is an important goal of criminal justice, but we also have to work on providing those rehabilitative opportunities.

So whether that, you know, I don't, more often than not, we don't do that just by building more prison beds.

We can be smarter, more precise, treating mental health conditions, treating substance use disorders, finding pathways for people to get back into the workforce, supporting employers who take what is a little bit of a risk to employ somebody that has been involved in the criminal justice system.

So, using those smarter approaches rather than just sort of a one size fits all, you know, mandatory minimum sentencing, or growing our prisons.

We can be a little more sophisticated than that.

- You mentioned mandatory minimums, that there've been a number of bills concerning mandatory minimums, and they don't seem to be doing very well.

- You know, it's a very hot debate.

You know, the attorney general has one point of view.

I think the governor's expressed some skepticism.

There was a lot of skepticism in the 2023 session that sort of split traditional factions and partisan leadings in the House of Representatives especially.

You know, mandatory minimums are another tool of criminal justice.

They can be appropriate.

I think in some circumstances we have something called the 85% rule in North Dakota where certain crimes that we list in statute, if you are convicted and sentenced for committing that crime, you must serve 85% of the sentence the judge imposes on you before you're eligible for release.

I think that's typically a little bit better tool than a mandatory minimum sentence.

Talk to prosecutors, talk to judges.

They tend to oppose mandatory minimums.

It sort of interferes with the intricate, you know, negotiations they are doing.

Sometimes a case has some weaknesses, that taking it to trial, you might risk an acquittal.

So you're willing to negotiate with the defense attorney to make sure you're getting some level of justice to guard against the risk of getting done at all for the victim.

Judges also, they are invested in the case by the time it gets to sentencing.

They know that particular defendant, they've gotten a pre-sentence investigation.

They're able to calibrate, I think, well, what's an appropriate sentence given that offender, the circumstance of that case, what happened to the victim, the criminal history.

I think taking those tools away from prosecutors, away from judges, probably does more harm than good.

- You mentioned substance abuse treatment, and mental ill treatment.

There's a, of course proposal to do $300 million for a new state hospital in Jamestown.

That issue has been around for years and years and years.

Is it going to start moving forward this time?

- I think we're definitely gonna see movement on the state hospital conversation.

You know, there are folks who make a very good point that it doesn't make sense to continue to centralize all state level mental healthcare at Jamestown.

The Constitution, you know, calls for that.

And we've been faithful to that, I think here in North Dakota.

But mental health is not immune to the workforce crisis.

As lovely as Jamestown and Stutsman County is, we know it's a little harder to recruit people from outside of North Dakota to a city they've probably not heard of that, you know, might feel more rural than urban to folks that we're trying to recruit into the state.

And we also, you know, we have population centers in all corners of the state.

You know, Williston to Jamestown, not a quick drive.

Grand Forks to Jamestown, not a quick drive.

It burdens our law enforcement resources who oftentimes are making those transports to and from Jamestown.

And we know people's long-term outcomes are better the closer their care is to the community they're from.

So I think we have to be smart in those investments.

I have, I have no doubt that Jamestown has a large role to play going forward.

You listen to the governor enough, he'll tell you too that every day, every month, every year you wait to start that construction, it only gets more expensive.

So I think we're gonna have to unlock this session, and move forward on a firm plan.

- But you mentioned the idea of regional treatment centers, and that's the Mathern Bill in the Senate, calls for, you know, not as much expansion at the Jamestown State Hospital, but having these regional treatment centers.

- Yeah, Senator Mathern has been a champion of this idea for a long time, and I think he makes some persuasive arguments.

That same workforce challenge also runs up against his proposal though to, you know, even though it might be a little easier to recruit and retain folks in Fargo and Grand Forks, and Bismarck than it is Jamestown.

We know it's still hard.

I think there's always a concern for me when we talk about new mental health options in any community.

Are we just robbing from Peter to pay Paul within that existing infrastructure and ecosystem of mental healthcare?

So I know Senator Mathern's bill is gonna get a full airing in the Senate.

This is probably one of those issues that's going to be resolved near the end of session as we see the whole playing field in terms of our appropriations, our budget, the interaction with, you know, a pretty moving landscape we've seen this week at the federal level where there's really chaos in terms of what funds are gonna continue to flow back down to the state.

So, I think it's very much a to be determined.

Stay tuned for more information on the state hospital question.

- Well, that's one of the, probably the last issues you're gonna be dealing with this session.

I know it's kind of early to predict, but what do you think are the, the main hangups toward the end of the session?

- I think we'll see again the tax questions, probably what we're gonna have to spend a lot of our time on with conference committees.

The House will move something here in the next couple of weeks, I'm sure.

Then the Senate will have its turn to dive in.

We'll hear from the governor's office throughout.

We know that large omnibus tax bill in 2023 went through a whole lot of conference committee hearings.

I wouldn't be surprised if that's true again.

I think our appropriators have a pretty good placeholder for what the impact on their budget work will be.

But it's those details that will probably keep us here late into April, maybe into May, maybe some long nights.

Even already as soon as next week we're starting evening sessions in the House of Representatives.

So there's a big push by leadership to make sure we're getting our work done as timely and efficiently as possible.

- And it's basically, you've got a record number of bills, approximately anyway.

- We do, we have the highest number of House bills and resolutions since 1991.

That's almost my whole life.

So I've never seen a number quite this big.

I think we have the highest number of overall bills between the two chambers since 2009.

It was, probably came in as a little bit smaller increase than we'd anticipated or maybe feared, based on the number of bill requests and drafts that our great staff and legislative council put together.

So maybe it's a little less onerous than we were fearing, but still it's, it's a high water mark in the recent past for the amount of work we have before us.

- Well, we have about a minute left.

And I have to ask you, because I always ask the leaders, when's Sine Die?

- Hmm.

- What day?

- The first Thursday of May.

- Okay.

And that is, who knows what day that is at this point?

- Haven't looked past the end of January yet.

- Anything that you're watching real carefully, any pet bills?

- You know, I really hope to make progress on my bill to let teachers qualify for a lifetime license after 20 years rather than 30 years in the profession.

It's already passed overwhelmingly in the House, as it did two years ago.

It died on a tie vote in the Senate.

So I gotta make sure everyone's there and healthy.

And we get it across the finish line here in 2025.

- So are you twisting arms in the Senate?

- I'll twist arms, I'll horse trade.

I'll beg, plead, and borrow.

Whatever it takes to make sure our teachers know that they're valued and respected professionals here in North Dakota.

- Well, I thank you very much for joining us today.

- Thank you, Dave.

It's always a pleasure.

- Our guest, Representative Zach Ista of Grand Forks.

He is the house minority leader.

And for "Prairie Public, I'm Dave Thompson.

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