Sen. Phil Murphy, Published July 01 2013
Letter: Do more for oil countryI would like to see how you do guessing the name of the county and county seat I visited last week. Here are a few of the situations facing that community:
They are in the Oil Patch; the county produces a quarter of the oil coming out of North Dakota. The seat had 1,500 people in the 2010 census. Now they believe the population of the city to be 12,500.
In 2013, the county gets 10 percent of the gross production tax back from the state to local governments. In 2014, it will be closer to 18 percent. (GPT is 5 percent; the extraction tax is 6.5 percent. When combined, the county will get back about 7.5 percent of what it contributes to the state in 2014.) The county budget for 2008 was $13.1 million – in 2013 it is $98.3 million.
They neither have nor do they know how they will have living spaces that teachers, city and county employees can afford. Houses that I assume are worth $100,000-$200,000 here in the rural Red River Valley are $450,000 to $750,000 there. Furthermore, with the rush for living spaces in an area where previously economic development had always been a struggle, zoning was lacking. As a result, many trailers/mobile homes are scattered around town that have been grandfathered in now that zoning has been put in place.
It came so fast that these residences have no addresses and no property taxes, so the city recently put in place what can effectively be characterized as a $400 bed tax as a way to attempt to raise some revenue. Have you guessed where this is yet?
We’re in McKenzie County and Watford City. The city annexed out so that it is about 5 miles square and is attempting to control residential and industrial sprawl. Mayor Brent Sanford is a smart guy who is a third-generation business owner in town (car dealership). He was a CPA and a CFO for a Denver corporation but came back home to run the business and serve his city. He, Linda Svihovec (McKenzie County auditor) and the county’s job development authority executive, Gene Veeder, packed my friend and fellow senator, George Sinner, D-Fargo, into a county vehicle and we drove around for a few hours. They are passionate public servants who are combining the powers and problems of their respective governments; they were pleased to explain their plight.
They need $190 million to house public employees and to build the infrastructure (water, sewer, streets) to meet that constructed by developers. Out of the energy impact fund, which has $40 million for oil cities not identified as hub cities (Williston, Minot and Dickinson), Watford City gets $10 million. The city and school district have somewhere near 12 new modular (FEMA mobile) homes still wrapped in shipping plastic; there are already that many more needed.
You may hear that some housing and infrastructure demands are leveling off, and it is true for some places. It is not the case for McKenzie County and Watford City. In 2008, they had a sheriff and four deputies. Now they have 14 deputies, but neither of the two outfitted with scales can take the time to weigh trucks because they are always working accidents. They have three more deputies slotted for approval this year. How one keeps them when they can make double working for the oil industry is another matter.
I propose that we allow affected counties to keep a greater percentage of the GPT until the oil play matures. Some of the growing pain is unavoidable at this rate of development, but we should consider a special session to further increase their share of the GPT on a temporary basis. We made good attempts and accomplished much this last session, but we can afford to do better.
If it is possible, visit the area to more fully understand. The people struggling to help themselves and their communities will appreciate it.
Sen. Murphy, D-Portland, represents District 20 in the North Dakota Senate.