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Mike Nowatzki, Forum News Service , Published February 20 2014

Western N.D. officials plead for bigger share of oil tax revenue

BISMARCK – Local government and school leaders facing mounting needs in western North Dakota pleaded with state lawmakers on Wednesday to give them a bigger share of oil production tax revenue, with one county official saying, “we’re down here on our knees begging you.”

About 70 local and state officials, lawmakers and others gathered at the Ramada Bismarck hotel to discuss how the 2013 Legislature addressed growth-related needs in western counties and to highlight needs piling up in oil-producing counties.

State lawmakers appropriated about $1.64 billion for highway improvement projects throughout the state and $617 million for city, county and township roads in 2013-2015, North Dakota Department of Transportation Director Grant Levi said.

But local leaders said it hasn’t been enough.

McKenzie County Commission Chairman Ron Anderson noted the county led the state in traffic fatalities the last two years, with 18 in 2012 and 24 in 2013. The county’s road and bridge budget for 2014 is $67 million – more than double the $30 million for all other county expenses – but its 2015 budget estimate projects a $75 million deficit, he said.

The state’s current formula for sharing oil and gas gross production tax revenues with local political subdivisions doesn’t provide enough for the county to tackle new projects and maintain its current infrastructure, Anderson said.

“That’s why we’re down here on our knees begging you. We’ve got to get caught up out there,” he said.

Watford City Mayor Brent Sanford stressed the need to change the oil tax formula, which currently sends 75 percent of the tax revenue to the state and 25 percent to political subdivisions. Sanford and others western officials are advocating a split of 40 percent state, 60 percent local.

Anderson said oil and gas activity in McKenzie County will generate $1.2 billion in gross production tax revenue for the state in each year of the current two-year budget cycle.

“And we’re getting back $80 million (per year),” he said. “We’ve got to do a little better. We can’t make it out there.”

Williston City Commissioner Brad Bekkedahl said a sunset clause that lawmakers placed on the formula to make it expire June 30, 2015, has been a roadblock with bonding agencies as the city tries to borrow money for projects.

State Rep. Keith Kempenich, R-Bowman, said the sunset clause was unnecessary.

“That doesn’t need to be there,” he said.

Officials from Dickinson, Minot, Watford City and Williston all listed hundreds of millions of dollars in capital improvements and infrastructure projects struggling to find funding.

Dickinson City Administrator Shawn Kessel noted that 20 years ago, some predicted North Dakota would revert to a “buffalo commons.”

“We can’t get any more opposite of that today,” he said.

The state’s Energy Impact Grant program, a $240 million fund created by lawmakers last session, also must do a better job of targeting grants to areas hardest hit by the oil boom, Sanford said. He called the $10 million Watford City received from the program “a bitter disappointment.”

Wednesday’s event, dubbed “Conversations with the West,” was sponsored by the North Dakota Association of Oil and Gas Producing Counties, the Vision West ND initiative and the Theodore Roosevelt Expressway Association.

Some have raised the idea of a special legislative session to address the west’s needs before the next regular session begins in January 2015. Anderson said the Association of Oil and Gas Producing Counties hasn’t decided yet whether to approach Gov. Jack Dalrymple to request a special session.

“But it’ll be soon,” he said.


Reach Nowatzki at (701) 255-5607 or by email at mnowatzki@forumcomm.com.