Math-Challenged Democrats Call Republican Oil Tax Bill "Radical And Reckless" Based On Fraudulent Numbers

Because they apparently didn’t get a number that was shocking enough the first time they were grandstanding on this issue, North Dakota Democrats re-calculated the numbers (which in and of itself inspires no small amount of skepticism, their original figure was $596 million) and concluded that a Republican plan to restructure the state’s oil taxes would “cost” North Dakotans $1.32 billion over five years.

You have to love how Democrats talk about tax dollars as though they belong to the government, and cutting taxes is a “cost.” But I digress. Here’s Senate Majority Leader Mac Schneider smack-talking the proposal through the power of alliteration:

“These new numbers, which are unquestionably conservative, really lay bare the radical and reckless nature of the GOP’s oil tax plan,” said Senate Dem-NPL Leader Mac Schneider, D-Grand Forks. “The billions in lost revenue under this bill should be used to improve infrastructure, address oil impacts, and continue property tax relief. That the majority would have these priorities shelved in favor of a sharp reduction in the extraction tax is stunning.”

To hear Senator Schneider tell it, you’d think this bill gives away the farm at a time when the state is short on funds. Of course, nothing could be further from the truth. The $1.32 billion “cost” they find over five years = stipulating to the idea that it’s a fair number, which it isn’t, more on that in a moment – breaks down to $264,000,000 or less than half the amount of personal and business income tax cuts already passed by the state House for the coming biennium.

And keep in mind that earlier today the state Office of Management and Budget found that statewide tax collections had exceeded last biennium’s collections by more than $1.6 billion to date. The state has collected, to date in this biennium, 64.6% more in tax revenues than last biennium including a 399.6% increase in oil tax revenues.

There is more than enough room in the state budget to shore all up the needed areas of state spending, to support local governments and infrastructure, and to give significant tax relief to individuals, businesses and the industry which is bringing all this prosperity to the state even when we use the math the Democrats are using.

But let’s take a closer look at that math.

Below is the full press release Democrats sent out. On page 3 you’ll note two charts showing how Democrats arrived at their figure for the impact of the oil extraction tax. They make some assumptions about oil production that are pretty strange.

I spoke with an official at the Department of Mineral Resource’s Oil and Gas Division who said “I have no idea where they got this information.” According to them, 2012 was an unusually active year for new wells with 2010 added. Yet even as exploration in the oil patch is slowing, Democrats project that the state will still be adding 1,750 new wells in 2017, four years from now, and will continue adding 1,750 wells every year for five years after that through 2012.

That is not a growth projection that is founded in fact. Democrats are projecting boom-times growth in oil wells eight years hence at a time when it appears as though exploration may be peaking.

But by inflating the future well counts and production numbers, Democrats can arrive at a much bigger scary number to throw into their press release.

This is policy fear mongering, which is bad enough, but even worse it’s fear mongering based on fraudulent data.