The famous sociologist and politician Daniel Patrick Moynihan once said, “Everyone is entitled to their own opinion, but not their own facts.”
These words were never more appropriate than in reference to the recent column by State Sen. Jim Dotzenrod, D-Wyndmere.
Dotzenrod would have readers believe that the 2015 Legislature cut oil taxes, but nothing could be further from the truth. Republicans passed an oil tax reform bill that eliminated a provision that would have cut the 11.5 percent oil extraction tax to 5 percent if the price of oil fell below $55 a barrel.
Without the Republican bill, the low-price oil tax break would have kicked in on Dec. 1 of last year, and funding for water projects, flood protection, property tax relief and infrastructure projects would have been virtually wiped out.
That’s right: the legislation in question eliminated a major tax break for oil companies.
In exchange for the elimination of the low-price tax break, the overall oil tax rate was reduced from 11.5 percent to 11 percent if prices exceed $90 a barrel for three consecutive months and 10 percent when oil prices are below $90 a barrel for three consecutive months.
[mks_pullquote align=”right” width=”300″ size=”24″ bg_color=”#ffffff” txt_color=”#000000″]Dotzenrod would have readers believe that the 2015 Legislature cut oil taxes, but nothing could be further from the truth. Republicans passed an oil tax reform bill that eliminated a provision that would have cut the 11.5 percent oil extraction tax to 5 percent if the price of oil fell below $55 a barrel.[/mks_pullquote]
Thankfully, the Republican-led Legislature did eliminate this low price tax break. As we all know, the price of oil has fallen to below $30 a barrel. By eliminating this low price tax break for oil production, the state of North Dakota is realizing an additional $30 million in oil tax revenue per month.
In fact, at current prices, our state will see an additional $540 million in revenue this biennium alone.
The $11 million a month Dotzenrod refers to was on top of the $30 million a month increase passed by the 2015 Legislature. The Democrats wanted to eliminate the low price tax break without any offsetting reduction in the top oil tax rate.
Apparently, the $540 million in new revenue from the oil and gas industry passed last session was not enough for them.
Of course, Democrats such as Dotzenrod can never get enough money to spend. Let’s remember how Democrats in the Legislature complained about Republicans not spending enough and saving too much for a rainy day. Just imagine where our state’s budget would be if our common sense approach had given way to their crazy “tax and spend” mentality.
Dotzenrod also stated that there was no reason to cut oil taxes as our state’s oil tax rate was “just below the middle of the range of the eight major oil producing states.” But once again, Dotzenrod is misleading the people of North Dakota.
The Covenant Report he cites used the average 2010 North Dakota oil tax rate of 9.8 percent in its analysis. In 2015, when the oil tax reform was passed, the average North Dakota oil tax rate had climbed to more than 11 percent, making it one of the highest tax rates in the nation.
The simple truth is that the Democrats were wrong to oppose the oil tax reforms proposed by the Republicans and wrong to want to tax more, spend more and save less. Now, they are attempting to run from their mistakes by rewriting history and distorting the facts.