Democrat Minority Leader Mac Schneider Owes North Dakota An Apology

Back during the election last year Senate Minority Leader Mac Schneider was throwing political bombs over Republican efforts to reform oil taxes during the 2013 session.

The reforms “would have cost our state $1.3 billion in the first five years alone,” Schneider wrote for the Grand Forks Herald, claiming that Republicans couldn’t “explain away” support for the reforms.

[mks_pullquote align=”right” width=”300″ size=”24″ bg_color=”#000000″ txt_color=”#ffffff”]Schneider was complaining about Republican tax reforms costing the state $1.3 billion over five years, or $260 million per year…Yet, because the reforms Schneider and other Democrats vehemently opposed as nothing more than handouts to “big oil” didn’t pass, the state stands to lose as much as $200 million in revenue over the next six months.[/mks_pullquote]

Of course, the reforms in question would have done away with a raft of oil tax exemptions including two oil price triggers which could potentially cost the state billions, all in exchange for a top rate on oil extraction/production that was just a few percentage points lower.

What’s ironic is that Schneider claims the Republican-backed tax reforms (which were ultimately defeated) would have cost the state $1.3 billion.

“North Dakota lawmakers say they fully expect depressed oil prices to trigger a tax exemption Feb. 1 for newly drilled oil wells,” reports Mike Nowatzki for the Fargo Forum. “Budget analysts estimated it would cause the state to miss out on an estimated $120 million to $205 million in revenue through June, compared with the latest revenue projection.”

Schneider was complaining about Republican tax reforms costing the state $1.3 billion over five years, or $260 million per year (another, harder-to-hit trigger could cost the state billions).

Yet, because the reforms Schneider and other Democrats vehemently opposed as nothing more than handouts to “big oil” didn’t pass, the state stands to lose as much as $200 million in revenue over the next six months.

Sure, Republicans have majorities in the state legislature, and had the Republican majority united behind SB2336 (or others) we would have gotten reform and done away with these triggers. They serve as landmines in our tax policy. They create a huge amount of revenue uncertainty.

It’s hard to produce good policy when revenue streams could shift by hundreds of millions or even billions.

But let’s not kid ourselves. It was Democrats, led by Schneider, who politicized that reform. It was Democrats who would have campaigned on it with glib slogans about “big oil” during the 2014 elections.

Republicans share the blame in not standing up to the petty partisan politics from people like Schneider, but it’s Schneider and Democrats who were the rhetorical leaders in killing reform.

Democrats in North Dakota often tout the influence they have as the minority party. It was on display in this instance, and they ought to apologize for having wielded it in such a short-sighted way.