Senate Panel Rejects Oil Tax Fix Amendment

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Written By:
Rob Port

Mar 22, 2011
10:31am

Which is about par for the course when it comes to the Republican majorities in Bismarck and tax relief. Despite huge budget surpluses – Governor Dalrymple’s executive budget projected a $1 billion surplus even with a decidedly nonconservative 24% increase in state spending – North Dakotans will only see a platry amount of tax relief from this session.

Dalrymple’s budget called for $50 million in income tax relief. The state House increased that to $150 million of combined personal and corporate income tax relief (the Senate has yet to approve it). Given that the property tax relief the state’s officials are always talking about is hardly tax relief at all – it’s more state spending at the local level – if the Senate goes along with the House the most North Dakotans can hope for is a level of tax relief that amounts to about 1/10th of the projected budget surplus.

Our political leaders are lavish when it comes to spending, but stingy when it comes to allowing the state’s businesses and individuals to keep more of their own money. That attitude was manifest once again with this decision:

BISMARCK, N.D. (AP) — A North Dakota Senate panel doesn’t like a proposal to reduce the state’s oil taxes in exchange for higher oil production.

House Republican majority leader Al Carlson of Fargo has been backing the plan. It would reduce North Dakota’s top oil tax rate in stages, from 11.5 percent to 9 percent. The lowest 9 percent rate would be reached if North Dakota’s oil production doubled to 700,000 barrels a day.

Carlson wanted the proposal attached to another oil tax bill. But the Senate’s Finance and Taxation Committee refused to do that Monday. The panel endorsed the bill without making the changes Carlson wanted.

At some point oil production in North Dakota is going to plateau – or some new federal regulation or market shift is going to cause the bottom to fall out of the oil market entirely – and these huge oil tax windfalls the state has seen will go away. Then North Dakota taxpayers will be faced with ponying up for years and years of Republican-backed growth in the state government.

During the last four legislative sessions, the state’s budget has doubled going up roughly 100%. This has largely happened on the back of tax revenues – direct and indirect – from oil activity in the state. It is an irresponsible level of government growth, and if something happens to those oil revenues (as has happened in the past) our state will be in a world of hurt.

But for right now the revenues are flowing, and it’s Christmas every day in Bismarck.

Would that our state’s Republicans – who dominate the state government – were better at limiting government instead of growing it.