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Sen. Mac Schneider and Rep. Kenton Onstad, Published March 09 2013

Letter: Cutting oil tax and attack on flood plan bad sausage

In a March 6 Forum column, House Majority Leader Al Carlson, R-Fargo, and Senate Majority Leader Rich Wardner, R-Dickinson, compared the first half of the North Dakota legislative session to “watching sausage being made.” We reluctantly agree, but hope the majority will set aside the partisan meat grinder and work with us to maximize our state’s prosperity during the session’s remaining days, because as things stand, some of the actions taken by the majority threaten to churn prime opportunities into mincemeat.

Take the radical and reckless cut to the oil extraction tax, something even Carlson and Wardner identify as “(o)ne of the most controversial issues this session(.)” The reason for controversy is apparent: The GOP’s cut to the tax is projected to cost the people of North Dakota $595 million in the first five years alone and, literally, billions in the coming decades.

The majority leaders have also alleged that the GOP plan “eliminat(es) the stripper well loophole(.)” It does no such thing. In fact, by grandfathering in existing stripper wells that produce 150 barrels or fewer per day, it actually cements open the loophole and ensures these wells will never pay a dime in the extraction tax. By setting the stripper well threshold for new wells at 40 barrels per day, the plan also ensures that even high-producing Bakken wells will one day revert to stripper well status once production declines. Therefore, even if you believe that a 31 percent cut to the oil extraction tax should be given “(i)n exchange” for closing a loophole that never made sense in the first place, the GOP approach fails the people of North Dakota.

The majority’s insistence upon these deep cuts to the oil extraction tax, coupled with permanent reductions to corporate and personal income taxes, undermine Carlson and Wardner’s claims that they are focused “especially on property tax relief.”

To the contrary, it was Dem-NPL senators who supported an amendment that would have re-directed $250 million in tax cuts for corporations and reductions in the personal income tax toward deeper property tax cuts, a measure which would have lowered property taxes by 12.5 percent across the board. The GOP rejected this property tax relief in favor of tax breaks that North Dakotans themselves rejected overwhelmingly and recently at the ballot box.

The leaders have also made notable omissions when touting their commitment to improving infrastructure, especially when it comes to “water and flood control projects(.)” Most glaringly, Carlson authored an amendment to a water bill that would scuttle the flood protection plan for Fargo, the city he represents. Protecting North Dakota’s largest city from flooding should be a statewide priority. At the very least, local leaders shouldn’t have to fend off opposition from their own elected representatives.

We enjoy working with Carlson and Wardner, and we were glad to see the majority embrace priorities like pre-kindergarten education and the sensible expansion of Medicaid during the first half of the session. However, when you place the GOP’s lack of focus on property tax relief and its push to pass oil tax breaks alongside the majority’s refusal to fund milk for schoolchildren and unwillingness to address the child care crisis, we can’t help but think they’ve ground out the wrong product for North Dakota.

Onstad, D-Parshall, is minority leader of the North Dakota House; Schneider, D-Grand Forks, is minority leader of the North Dakota Senate.