Legislators: Let's Increase Western Share Of Oil Revenues To 60 Percent


Western Republican Legislators and Candidates last week released a very detailed and comprehensive $800M “surge” plan to address oil producing and non-oil producing counties immediate needs.

This was step one of a two part plan to address the states infrastructure needs. The surge plan is meant to quickly and efficiently get money out to all counties early before the 2015 construction season; something similar was done last session and worked very well.

The 2011 and 2013 sessions legislators made historic investments in Western and state infrastructure, but we must and should triple the amount of money for these critical investments needs.

The next step, supported by western Republican lawmakers and candidates, involves changing the oil and gas counties funding formula. Western counties are generating billions of dollars in oil taxes revenue and the current funding formula is not enough to cover their impact costs.

The main change would be to the allocation of oil tax revenue. Currently the State of North Dakota keeps 75% of the Gross Production Tax (5% tax on oil) and local political sub-divisions keeps 25%. We propose changing this to 40 percent for the state and 60 percent for western counties and political subdivisions.

The percentage of oil tax revenues left locally through the formula would increase to 28% from the current 11%.

To put this change into prospective, it means about $1 of out every $4 in oil tax revenue generated would stay locally. If it’s ok to put 30% of the oil tax revenue away in the Legacy Fund for future generations, then it would seem appropriate to reinvest a similar percentage back into the areas the taxes were generated in the first place.

These funds would be used to cover “needs” and not “wants.”

Under this formula change all Constitutional funds like the Legacy Fund, Common School Trusts Fund, Foundation Aid Stabilization Fund, and Water Resources Trust Fund are fully funded and in fact will have more money allocated to them than the previous biennium. Not a single dollar will be diverted away from any dedicated state funding projects or funds like The Heritage Fund, Disaster Relief Fund, Reclamation Fund, Property Tax Relief Fund, Budget Stabilization Fund, or the State General Fund.

Importantly by the end of the 2015-2017 biennium the Strategic, Investments and Infrastructure Fund (SIIF) will still have hundreds of millions of dollars in excess money in the bank for infrastructure project in the following biennium.

This plan is affordable, fiscally responsible, sustainable, and is the right thing to do for the State of North Dakota. The North Dakota oil and gas energy renaissance is a great thing to North Dakota as a whole and we must invest in our communities and citizens if we want our great state to continue to be the envy of the nation.

Rep. Roscoe Streyle is a Republican from Minot representing District 3. Senator Kelly Armstrong is a Republican from Dickinson representing District 36.