Ballot Measure to Raise North Dakota’s Oil Tax Does a Belly Flop

Crews work at an oil well site near Williston, N.D., on Wednesday, Oct. 12, 2016. Amy Dalrymple/Forum News Service

A week ago I wrote about a ballot measure to raise the state’s oil taxes – one backed by current and former Democratic lawmakers – was getting a cool reception even from some of the state’s left-of-center groups.

Organizations like North Dakota United (the combined teacher and public worker unions) as well as the North Dakota Farmer’s Union declined to join a coalition supporting the measure. Now the measure organizers, just two weeks after announcing their initiative, are calling it quits:

Former Democratic state lawmaker Ed Gruchalla said the effort lacked backing from any “major groups” and faced fierce and well-funded opposition from the oil industry. He said the proposal could come back in a future election or during the next legislative session.

“We know it takes money to win (an) initiated measure,” Gruchalla said. “We just don’t have the funding right now.”

The ballot measure would have raised the state’s oil extraction tax from 5 percent to its previous rate of 6.5 percent, reversing a central piece of the overhaul lawmakers passed in 2015. Gruchalla previously argued “it would bring money back to the citizens of North Dakota that was stolen in a shady last-minute deal in the final days of the (legislative session).”

“Stolen.”

That’s rich. So far the oil industry in North Dakota has seen their tax payments to the state increase by more than $1 billion thanks to this supposedly “shady last-minute deal.”

Except, it wasn’t a shady deal at all. It was good reform of a tax code that badly needed it. The low-price trigger exemption that existed before the reforms was like a landmine for budget writers. They had no idea when oil prices might blow a multi-billion dollar hole in tax revenues. So the exemption was gone, and as part of the compromise for getting rid of it the top extraction rate was lowered slightly by 1.5 percentage points.

That’s all very reasonable stuff unless you’re a left wing demagogue.

Democratic legislative candidates tried to campaign on this issue in the 2016 elections and they got creamed. Now a ballot measure based on the issue has fizzled on the launch pad.

One gets the feeling that our liberal friends have spent a bit too much time listening to their own talking points.

Rob Port is the editor of SayAnythingBlog.com, a columnist for the Forum News Service, and the host of the Rob (Re)Port on Fargo-based WDAY AM970 from noon-2pm weekdays.

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