Oil Tax Cuts Fall Flat In North Dakota House

Oil_Pu331

With no debate, outside of bill carrier Rep. Craig Headland explaining his committee’s “do not pass” recommendation for the bill, the most controversial tax bill before this legislature fell flat on its face in the state House today.

The vote was 6-87.

Taxes, I think most would agree, ought to be fair. Meaning they ought to be broad and flat, so that everyone has some skin in the game when it comes to paying for government. I think most also agree that when the government has far more money that it needs – and that accurately describes North Dakota’s state government right now – they ought to give some of that money back in the form of tax relief.

The state House has already passed a big, half-billion income tax relief package for the state’s individuals and businesses. But today they refused to give a little tax relief to the “goose” that is currently laying the state’s “golden eggs.”

That’s extremely short sighted.

Political it might have been the right move. The Democrats, and their allies in the state media, were going to have a field day with Republicans voting to give tax relief to “big oil” playing on the public’s irrational distaste for that industry. So perhaps they did the expedient thing, but five years hence when we’re past the peak of the Bakken oil boom (and at the time when these tax cuts would have kicked in) we may wish this legislature would have had the foresight to pass them.

This debate isn’t over yet, though. HB1234, which is a somewhat similar reduction in oil taxes, has passed the House and is in the Senate.

Rob Port is the editor of SayAnythingBlog.com. In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters. He writes a weekly column for several North Dakota newspapers, and also serves as a policy fellow for the North Dakota Policy Council.

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  • nodaker

    Or, you know, in five years, if things do start to slow down, we can cut the taxes then.

    This was a completely unnecessary proposal. The industry is drilling flat out, at nearly unsustainable rates. To claim they’re going to pack up and go home because of the current rates (that have done NOTHING to hamper the boom) is laughable at best.

    My only concern is how poor Harold Hamm will make it. I mean, yeah he’s the 76th richest man in the world, but if this passed, he could have moved up a few more spots! Think of how all the richer guys are going to tease him now. Awful… just awful.

    • http://sayanythingblog.com Rob

      Or, you know, in five years, if things do start to slow down, we can cut the taxes then.

      You clearly don’t know a lot about how these policies work.

      • nodaker

        The legislature meets every two years. Are you saying they can’t make changes in the future?

        • http://sayanythingblog.com Rob

          I’m saying that they can’t make changes which take effect all that quickly.

          The time to do it is now. In the future, as the peak of the Bakken production comes and goes, may be too late.

          But “big oil” or something, right?

          • nodaker

            Well then, introduce a tax cut that’s linked to the value of oil. Let it trigger if prices drop below a certain point. That way, if the market is soft, the tax rate will drop to support continued industry activity.

            But, that’s not what the oil industry is after. They just want across the board tax cuts, even though they’re already making money hand over fist. Meanwhile, the taxpayers of ND are going to be left holding a big bill for infrastructure and all sorts of oil associated costs for decades to come. Not to mention potential cleanup after the oil boys bail. Because we all know if there’s one industry that has a sterling environmental record, it’s oil!

            To hell with spending the surplus or giving cuts while the industry is booming- we should be investing in dealing with the economic and societal dislocation being caused, and saving up funds for the inevitable aftermath. When the party ends, there’s going to be one hell of a hangover.

          • http://sayanythingblog.com Rob

            There’s going to be a hangover when we tax the industry out of the state, which we’ve done before under the leadership of Democrats.

            We’re going to get past the peak, the low hanging fruit will be gone, and they’ll start to leave.

            Then we’ll have a huge expansion of state government to pay for and plummeting revenues.

            We should be preparing now, but sadly your ignorant attitude is far too common.

          • somebodysomewhere

            Honestly, I doubt they will leave. There’s too much money in the oil – and there’s a ton of oil yet. This can be reviewed again in two years – they won’t pack up and leave before the next legislation. Remember, this was not just about tax cuts – there were some increases included in that bill.

          • dakotacyr

            right!

      • Dallas

        Hey Slim. Got news. you don’t know how they work either.

        • http://sayanythingblog.com Rob

          Says the internet troll.

    • nimrod

      There are a lot more people paying extraction taxes than the operating companies like Continental oil. A typical well will have several others with a working interest as well as dozens or hundreds of mineral owners who are all paying 11.5% extraction tax, followed by federal income tax, and then state income tax. The jealousy thing over Harold Hamm’s self earned wealth is short sighted and pathetic.

  • borborygmi

    In two years time they can revisit this again. Sometimes the wishes of the majority of people and the legislatures vote actually coincide

  • ec99

    ” but five years hence when we’re past the peak of the Bakken oil boom”
    I think different people have different crystal balls. I heard an oil CEO state there were 50 years of oil in the Bakken.

  • Ladd

    major flood forecasts come out for the valley where billions are wanted for flood control projects, and the main oil tax reduction bill endorsed by all the leadership becomes fish wrap….It’s magic ….. .

    • http://sayanythingblog.com Rob

      You’re a short sighted fool, Ladd.

      • Ladd

        Perhaps…But how do you explain that a bill written by the NDPC and for which all the leadership held press conferences about more than once telling us that the bill was necessary or the oil companies will leave us only got 7 votes in the House after a party line vote in the Senate. I realize that there is still a house bill in the Senate now and that might still have some legs. But I expect it will see serious revisions from what the bill looked like in the House. ….

        • http://sayanythingblog.com Rob

          I call it politics. It was the right thing, but Dems and their media allies were going to portray it as a handout to big oil, and perception is reality.

          So we’re denied forward-thinking policy because most in the public don’t understand the issue and ask the media is going to do is regurgitate “big oil” taking points.

  • Roy_Bean

    They can’t cut taxes now! There’s still all that wealth they have to redistribute.

  • Dallas

    I agree, ‘taint over till the fat lady sings and she hasn’t tuned-up yet. Either the oild inudstry will get some type of tax relief or Ed Schafer is unemployed again. Someway, some how, Republicans, who recieved thousands in political contributions, will some up with a way to pay the oil boys back. And hey, Ed needs the job and money.

  • jimmypop

    i hope they dont move all our oil to somewhere else. sheesh…..

    when all the needs of the west are taken care of THEN you lower their taxes. for now pour than money into that area like a tidal wave. you dont lower it ONE CENT until that time. even if the boom busts, we will have GOOD roads ready for the next boom.

    • http://sayanythingblog.com Rob

      We have more than enough money to take care of the west’s needs and then some.

      • The Fighting Czech

        how bout we let the people in the West decide when they dont need anymore of THEIR money….

  • Guest

    Big Oil can’t be happy with their return on politician investment. A few Republican legislators likely have some explaining to do.

  • Dallas

    Your full of crap. The industry was not taxed out of the state in the past. That’s an oil industry/Republican talking point. I assume you’re blaming the industry collapse in the mid 80s on the passage of Measure #6 in 1980. The two are not connected.
    The industry collapsed world-wide because crude oil prices dropped down to $14 to $16 a barrel. The drop in oil industry activity was even worse in Montana than North Dakota and they had no measure #6.
    Prices today are about $80 to $100 a barrel. The President of Whiting Oil, one of the majors in ND’s oil patch, recently said his company made great money at $30 a barrel in North Dakota,

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