NEW YORK (CNNMoney) -- Voters in North Dakota, where the economy is swelling with money from the oil boom, are going to the polls Tuesday to possibly get rid of property tax in the state.
North Dakota boasts the lowest state unemployment rate in the country and has become the nation's second-biggest oil producer. As a result of the energy rush, government coffers are flush with revenue.
The proposal, known as Measure 2, would amend the state's constitution. If it is approved, North Dakota would be the only state without a property tax, according to the Tax Foundation, a research group that advocates for lower taxes.
Property tax is assessed based on the estimated value of a property. It is typically the source of a steady stream of revenue to fund government projects. At the same time, anti-tax advocates often identify it as a burdensome hit to homeowners.
Charlene Nelson, head of Empower the Taxpayer, the grassroots organization pushing Measure 2, said eliminating the tax is something her organization has been gunning for over the past five or six years.
Nelson said the tax is unfair and pushes many local citizens out of their homes because they are on fixed incomes or have lost their jobs. The state government has plenty of money to offset the $800 million in annual revenue that will be given up if the property tax is abolished, she argued.
The economic boost of the new oil boom makes this the perfect time for North Dakota to finally approved the measure, she said.
"This oil boom is bringing between $4 million and $6 million every day into the state coffers and that's over and above all the other growth in other revenues," said Nelson. "The oil boom could pay for the property tax in one month."
While tax revenue at all the states grew an average of 9% last year, North Dakota's revenue surged 44%, according to Joe Henchman, vice president of legal and state projects at the Tax Foundation. From 1997 to 2011, the state's tax revenue has increased about 10% per year, while nationally it has risen about 4% per year.
The $800 million the state would forgo in annual tax revenue represents about 23% of North Dakota's state and local tax revenue, according to the Tax Foundation.
Local governments opposed to the measure worry the revenue hit would jeopardize funding for school systems, infrastructure projects and other key programs.
But Henchman said the state government would likely intervene with aid to fill holes left in local government budgets.
"The state government is awash in money," said Henchman. "They never went into the recession, never had budget problems -- things have been going pretty well in North Dakota, so now they're saying, 'Hey, we have all this money, what should we do differently?' "
A number of states have discontinued income tax when they had another revenue source they could rely on instead. Alaska and Texas, for example, did this when they realized they generated enough tax revenue from oil, he said.
While the measure's fate at the polls is unclear, Henchman said it's more likely to get support now than it would have a few years ago because of the oil boom. "Now, North Dakota has the revenue to eliminate a major tax," Henchman said.
But Connie Sprynczynatyk, executive director of the North Dakota League of Cities and an opponent of the proposal, said there is no guarantee that the oil boom revenue is here to stay.
"This measure takes the most predictable source of tax funding for local services and replaces it with among the most volatile of tax revenue sources," she said. "We don't control the price of a barrel of oil, the world market does ... so the revenue is great right now, but we don't know what it will be two years from now."
|What we want Apple to unveil at WWDC|
|Millennials squeezed out of buying a home|
|7 traits the rich have in common|
|Big Data knows you're sick, tired and depressed|
|Your car is a giant computer - and it can be hacked|
Carlos Rodriguez is trying to rid himself of $15,000 in credit card debt, while paying his mortgage and saving for his son's college education.
Susan Carson and Laura DeLallo make $225,000 and have half a million in retirement savings, but their sprawling portfolios is proving hard to manage.
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||3.73%||3.76%|
|15 yr fixed||2.93%||2.96%|
|30 yr refi||3.80%||3.83%|
|15 yr refi||3.01%||3.04%|
Today's featured rates: