John Olsrud: Does It Matter What Voters Had To Say On The Oil Extraction Tax?


In Susan Wefald’s book, Important Voices; North Dakota’s Women Elected State Officials Share Their Stories 1893-2013, she writes that when she was elected to the North Dakota Public Service Commission, she realized from the beginning that it was not her job to look after the large companies who came before the PSC, as they had their own lobbyists and plenty of money. Her job was to speak for the people working jobs and raising kids.I sure hope our legislators see their roles the way Susan Wefald saw hers as they consider reducing the oil extraction tax. The oil extraction tax was approved in 1980 as Initiated Measure 6, which established the rate at 6.5%. Subsequent votes of the people have amended the state constitution to set aside portions of that tax for the Legacy Fund, the Resources Trust Fund, the Common Schools Trust Fund, and the Foundation Aid Stabilization Fund.

When the people of North Dakota approved these constitutional measures, do you really think they intended that these various funds would only get money when oil was above a certain price? Did the people ever anticipate there would be a time when funding for the one-time harvest of oil would be the victim of something called a “trigger”? Do you really think the people intended that the oil extraction tax rate set by the voters would be permanently reduced in order to get rid of statutory triggers created by the Legislature? A reduction in the tax rate means a permanent reduction in deposits to these constitutional funds.

It is significant in this discussion to emphasize that the oil extraction tax and its rate and each of these constitutional funds were created by votes of the people of North Dakota. The tax triggers were created by the Legislature. The Legislature can change the tax and its rate because they were created by a statutory initiated measure. Although the constitutional funds cannot be changed by the Legislature, the tax triggers can reduce or eliminate funding for them, which has the effect of changing the funds without a vote of the people.

The major policy decision to be made is whether the Legislature should fix a problem it created—the tax trigger—or should the Legislature change something approved by vote of the people—the oil extraction tax rate.

We know the large companies advocating a reduction in the oil extraction tax have their own lobbyists and plenty of money. The very fact a reduction in the oil extraction tax rate is being considered is a testimonial to the effectiveness of these lobbyists and their money. We need to ask who is representing those people working at jobs and raising kids, and the old folks living on fixed income who do not have their own lobbyists and plenty of money? Who are the lobbyists for the Legacy Fund and the other constitutional funds described above which have so much at stake?

Wouldn’t it be great if we could count on 94 state representatives and 47 state senators to represent the people who cannot afford their own lobbyists? Wouldn’t it be great if those legislators saw themselves as the trustees of the constitutional funds created by the people and if they saw themselves as the protectors of the revenue stream into those funds? Wouldn’t it be great to see those legislators honor the will of the people as expressed by their votes on these initiated and constitutional measures?