Darrin Tonsfeldt, West Fargo, Published March 15 2013
Letter: It’s really question of legacyA question for all of us who are residents of North Dakota: What kind of legacy do we want to leave for our children and generations beyond? We have a great opportunity in our state to benefit from the one-time harvest of our mineral resources and with our Legacy Fund have made a start to securing a bright future for North Dakota residents. I am concerned though by the efforts of some legislators to decrease the revenues we get as a state from oil and gas and increase the profits of already profitable, primarily out of state corporations. Most of us understand companies need to make money to stay in business and it is the nature of a well-run business to be as profitable as possible. It is very important we all as residents of North Dakota remember it’s not up to those companies to decide what is best for our state and us as residents. It is up to us to make those decisions.
The Legacy Fund as it exists is not enough to make the kind of impact we need to deal with repairs and expansion of infrastructure, damage to our environment, pressure on our schools and social service, and to secure the future well-being of our state. It is, though, within our grasp to increase the Legacy Fund to a level that can make a real impact. Image what a $10 billion trust fund could do. Held as a secured principal and conservatively invested, my financial investor friends have informed me that a 5 percent return is very achievable. In other words, $500 million a year that could be invested in roads, housing, schools, conservation, health and possible even property tax relief.
The argument from the legislators who are advocating for reducing the tax on oil and gas production and extraction is that it is anti-business and the oil and gas companies will go elsewhere to drill. I for one do not buy that story for a second. For one thing, the resources are here, and secondly many other oil-producing states have extraction taxes that are funding trust funds. Alaska’s Permanent Fund has more than $40 billion in it; Wyoming’s Mineral Trust Fund has more than
$5 billion; Texas has more than
$8 billion in its Economic Stabilization Fund; Alberta, Canada, has more than $16 billion in a trust fund; and New Mexico has more than $15 billion in funds, with a good portion of the return on those funds going to their schools.
Currently, several other oil- and gas-producing states are looking to start trust funds or increase revenue into existing funds. So where are these states with mineral resources and no taxes that these companies are supposedly going to run off to?
In conversing with a geologist working in our state, I asked what would happen if North Dakota slightly raised its extraction tax to increase revenues into the Legacy Fund: Would it stop or slow down drilling? The geologist’s reply was, “No, it will not stop drilling or slow it down.” In short, the geologist’s opinion was the oil is too valuable and the market too competitive and slowing will only occur when available land for drilling opportunities reduces or the oil starts to run out.
The future I’d like to see for our state is one with a very healthy Legacy Fund, $10 billion or more, that will help to make sure we are a state of low taxes, great education, diverse business opportunities, quality conservation programs,and mostly a very healthy place to raise a family. If you are interested in this kind of future call your congressmen or senator and request they do not support a reduction of oil and gas revenues. In addition, it is time for us to advocate for a much larger Legacy Fund with a secured principal that will help ensure North Dakota remains a great place to live.