House Shoots Down Bill To Make Oil Tax Simplification Revenue-Neutral

In a state where revenues are running, in the current biennium, about 67% above last biennium we have no business raising taxes. But Democrats, joined by a number of Republicans, lead the charge to kill a half-cent decrease in the state’s oil extraction tax.

The idea was to offset the tax increase resulting from the legislature ending an exemption to the tax for stripper wells. It was widely agreed that the stripper wells exemption needed to be ended, but many legislators felt that with the state already awash in tax revenues there was no need to increase any tax.

But Democrats, and some Republicans, were effective in casting the move as “tax cuts for big oil” and suggested that the reduction would impact the state’s ability to address infrastructure concerns in the west.

Here’s Democrat Minority Leader Kenton Onstand making that point, and Rep. Dave Drovdal responding to it:

The Democrat argument was silly, but effective given the public’s distaste for anything even appearing to be tax relief for “big oil.” Ending an exemption, and coupling it to a reduction in the extraction rate in a revenue-neutral manner, is not a “tax cut.” And even with that tax reduction the state has more than enough funds to reduce taxes.

Again, a state with a revenue surplus like North Dakota’s has no business raising taxes. Truth be told, the state ought to be on an aggressive, across-the-board tax cutting mission.

But raising taxes is what we got today from the oil industry.