Bad Idea: Ryan Taylor Wants 40% Of ND Oil Revenues To Go To Western Communities

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Written By:
Rob Port

May 21, 2012
4:43pm

Democrat Governor candidate Ryan Taylor wants more oil money to go to communities in the western part of the state. He says too little goes there now, and he wants as much as 40%.

Now, I agree that western communities are facing enormous challenges and impacts from oil. The state should be supporting them, but they won’t be facing those challenges forever. Eventually things will equalize, and this sort of a radical change in the way our state’s oil tax revenues are divided seems foolhardy.

BISMARCK, N.D. — Democratic governor candidate Ryan Taylor says local governments in North Dakota’s western oil-producing region should get a bigger share of oil tax collections.

Taylor says western North Dakota counties, cities and schools are now getting only between 8 percent and 11 percent of oil revenues, but he says the share should be close to 40 percent. He says other energy-producing states guarantee local governments a much bigger share of energy tax money.

I suspect that for Taylor this is less a serious budget proposal than an attempt to fan the flames of some of the negative energy that has cropped up in western North Dakota. The oil boom has created hardships, and Taylor wants to capitalize on them by painting Dalrymple as disconnected and uncaring.

He would have had more success with that strategy last year than this year, I think. Last year we faced a terrible winter, and a rough spring/summer full of flooding. That’s really when the oil impact on western communities became a problem. This year we’re coming out of a very mild winter, with no flooding, and a lot of the $1.2 billion in spending appropriated during the last legislative session is having an impact. People can see the construction that is putting in new roads and infrastructure, as well as the developers catching up on housing.

But I digress.

Here’s a chart breaking from the Office of Management and Budget breaking down the complicated manner in which North Dakota’s oil revenues are split up (click for a larger view):

Just to put Taylor’s call for 40% in oil revenues going to western communities into perspective, the state Legacy Fund soaks up 30% of revenues, which has worked out to an average of $40 million per month since September of 2011.

Again, western impacts are significant, but does Taylor really think shifting tens of millions of dollars per month to western communities permanently is a good idea? What happens after the impacts of the oil industry have stabilized? And which of these other funding areas would Taylor de-fund to make his 40% proposal possible?

Should we take it from the schools trust fund? The state disaster relief fund?

Again, I think this is less a serious fiscal proposal as Taylor trying to play oil boom politics.