Is North Dakota’s Government Prepared For Life After The Oil Boom?
Narayana Kocherlakota, the president of the Federal Reserve Bank in Minneapolis, visited the Bakken oil fields last week. Kocherlakota was dismissive of the importance of the oil boom nationally, which is unfair because the story of America’s shale oil/gas revolution is larger than just North Dakota, but setting that aside this note from the end of a report about his visit caught my eye:
Kockerlakota also noted that western North Dakota’s boom will at some point become a bust. He said people should be prepared for that to happen at some point by investing what they have now.
That’s good advice for individuals, and it’s good advice for the state government as well. Growth in the state’s budget is nothing short of alarming, as I’ve written about ad nauseum over the last several years. Yet tax relief has been paltry.
We could expect some growth in the state budget to come along with the oil boom – you can’t see the sort of social and economic growth this state has without growing government – but over the last decade North Dakota’s budget has been growing at a rate faster than the federal government.
When you’re outspending Barack Obama, there’s a serious problem.
We are living in some unique times in North Dakota, and some are taking it for granted. Some are carrying on as if this were the new normal. It’s not. What we ought to be doing is leveraging this moment in time to do something truly unique to truly ease tax burdens which, in turn, would do more to help diversify and expand our economy than decades worth of the “economic development” policies which get so much attention.
The biggest accomplishments of this boom era of leadership in North Dakota may well be an exploding in state spending, and convincing North Dakotans that paying for things at the state level instead of the local level is somehow tax relief.Tags: bakken, North Dakota News, oil