Vicky Steiner Column: Fargo Forum Gets It Wrong On Western North Dakota Funding
An editorial was printed in the Fargo Forum related to funding being provided to western ND. We would like to provide a few facts that may change the opinions expressed on the matter.
The state of North Dakota returned $1.044 billion, not $2.5 billion, for several units of local government – counties, cities, townships, and schools primarily. State offices quote the “big number” but it includes both oil and non-oil distributions. The oil industry and all the supporting industries generate $2.5 Billion in total revenues for the state every month. Truth be told – basic infrastructure (ex. roads, sewer and water) in western ND is not keeping up with demand and falling further behind each day those needs are not addressed.
Let’s break down the $522 million received annually that western North Dakota currently receives as its share of the oil tax revenues generated in western North Dakota.
Counties, cities, schools: $295 million
Energy Impact funding: $120 million
County & township roads: $92.5 million
Law Enforcement: $5 million
Hospitals: $5 million
Townships : $4.5 million
Total: $522 million
$522 million sounds like a lot of money, but consider this- McKenzie County will receive about $53 million a year from the 5% “in lieu of property tax” oil tax. McKenzie County has the majority of the drilling activity or about 70 rigs drilling within the county every week. They have documented a shortfall to date of $75 million. The city of Dickinson will have over $100 million of debt accumulated in just two years, they didn’t have any debt pre-impact. Other communities have similar stories.
The 5% Gross Production Tax formula needs to be changed so that the west can catch up.
The legislature funded $1.6 Billion for highways across the state. DOT determines how it’s allocated and it’s for state highways only. The cities can’t use it fund the much needed construction of water or sewer lines, water towers or lift stations.
The editorial missed a serious issue as reported in the Bismarck Tribune on Feb. 13 – the sunset clause placed during the 2013 conference committee work on House Bill 1358. Lending institutions will not approve additional bonds or loans to western ND hub cities because the new funding formula in HB 1358 ends June 30, 2015. A sunset means the HB 1358 funding ends and pre-existing law takes over. That means western political subdivisions are at the end of their financial ropes. Meanwhile, the state continues to build “surpluses.” This means the cities of Williston, Watford City and Dickinson will likely miss the construction season of 2015. That means less work for ND construction firms eager to help build their capacity.
We believe these issues are serious enough to warrant discussion of a special session. Your editorial board is invited to come out and see these struggles and see why an additional investment will pay dividends in the long run for the whole of ND.
The North Dakota Association of Oil and Gas Producing Counties Executive Committee: President Steve Holen, Watford City; Past President Dan Brosz, Bowman; Ron Anderson, McKenzie County; Jim Arthaud, Billings County; Greg Boschee, Mountrail County; Jason Kersten, Bottineau; Shawn Kessel, Dickinson; Gary Melby, Bowbells; Mike Ness, Hazen; John Phillips, Beulah; Gary Wilz, Killdeer
