Legislative Republicans Announce $800 Million In "Surge" Funding For Oil Patch

Earlier this year Democrats were making a stink about needing a special legislative session to address needs in western North Dakota. That part of the state is dealing with explosive growth in industry, commerce and population. Democrats argued that a special session was needed to appropriate funds to those needs.

Ultimately that idea was rejected by Governor Jack Dalrymple, arguing alongside legislative Republicans that those needs could be addressed adequately during the regular session coming up in January.

Today we got a preview of what legislative leadership is looking at doing for the oil patch in terms of funding. Senate Majority Leader Rich Wardner, a Republican from Dickinson, announced some details alongside fellow Republicans Senator Kelly Armstrong (Dickinson), Senator John Andrist (Crosby), and Rep. Mike Schatz (New England).

In total, they’re proposing $800 million in “surge” funding to be approved at the beginning of the legislative session (normally bills aren’t approved until after the midpoint of the legislative session when the House and Senate exchange the bills they’ve passed). Here’s how it would break down:

  • $475 million to oil producing counties and cities
  • $140 million to the three hub cities-Williston, Dickinson and Minot
  • $35 million to oil producing county schools
  • $150 million to non-oil producing counties and cities for roads

According to the press release sent out announcing the spending (see below) this is a one-time bill. The idea is that the Legislature will also address funding formulas to give local governments a larger slice of oil tax revenues going forward so that funding bills like this aren’t necessary.

The question, of course, is how large a slice locals will get. There’s no denying that there are very real, and very critical, funding needs in oil patch communities. But do those communities need a third of all of North Dakota’s oil revenues forever? Or can they make do with a smaller percentage once the dust settles immediate impacts of the oil boom are past?

I’m sure locals governments and their lobbyists will tell us they need as much as they can get, and they’ll use the “oil impacts” trump card to try and get it. It will be interesting to see how the Legislature as a whole responds.

You can bet what the Democrat response will be. They’ll say this funding is nice, but that the oil patch needs more. Because that’s the safe bet, right? There is almost no scrutiny on how locals are spending the windfall of tax revenues they’re already getting – both from the state and their own local taxes. The locals and their lobbyists have been very effective at putting the blame on the state for funding.

Public perception being what it is, Democrats can stand on the sidelines and claim that more is never enough.

Here’s the press release:

Proposed Bill Will Provide Necessary Support Across the State

BISMARCK, ND – Senators Rich Wardner, John Andrist and Kelly Armstrong, and Representative Mike Schatz announced an early funding bill today to support North Dakota cities and counties.

Western Republican legislators have been meeting with local officials to develop a plan that will provide funding support to the oil producing counties and cities as well as ensure that all state funding obligations are met.

The proposal is an $800 million surge funding bill:

  1. $475 million to oil producing counties and cities
  2. $140 million to the three hub cities-Williston, Dickinson and Minot
  3. $35 million to oil producing county schools
  4. $150 million to statewide counties and cities for roads (excluding oil producing counties)

The early passing of this bill will allow cities and counties the opportunity to prepare for the 2015 construction season and will ensure communities in and out of the oil patch will have money available for shovel-ready projects on July 1st.

The funds are surplus money from the current biennium and will come out of the Strategic Investment and Improvement Fund (SIIF).

Senator Wardner explains, “We are experiencing growth in the energy, agriculture and manufacturing industries, among others, at record levels in North Dakota. The state is expanding every day as the economy diversifies and business continues to boom. In order to continue this growth it is important that we take care of the needs in oil country. The need for skilled workers cannot be completed without housing, and adequate housing cannot be completed without major infrastructures and services provided by the cities, school districts and counties. This funding will allow the political subdivisions to provide the infrastructure and services, and will encourage North Dakota to continue growing while retaining our quality of life.”

This will be a one time-funding. There will be an upcoming legislative proposal to address the funding formula for ongoing future needs to ensure that this type of surge bill will not occur in the future.

With the population increases, county and city road projects, and housing shortages all occurring in the oil patch, the goal of this bill is to provide communities with the tools they need to provide infrastructure for the people in Western Dakota.

Rob Port is the editor of SayAnythingBlog.com, a columnist for the Forum News Service, and host of the Plain Talk Podcast which you can subscribe to by clicking here.

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