DICKINSON — The Legislature approving a revised oil and gas gross production tax formula and surge bill guarantees concentrated money gets spent in struggling cities and counties in western North Dakota, said Senate Majority Leader Rich Wardner, R-Dickinson.
At the North Dakota Petroleum Council annual meeting, Warner shared what former CIA Director and U.S. Army Gen. David Petraeus had told him during his visit to the Bakken last year: "This kind of looks like a war zone."
"We're hoping our surge works like his surge worked," Wardner said.
Wardner detailed the Republican-proposed $800 million early spending bill announced this month. The money would come from the Strategic Investment and Improvement Fund, which Wardner predicted would be at $1.2 billion at the onset of the 2015 legislative session.
The bill says oil-producing political subdivisions would receive $475 million and the three hub cities Williston, Dickinson and Minot would receive $140 million each.
"They get the lion's share...," Wardner said. "That is where the impacts are."
House Majority Leader Al Carlson, R-Fargo, said he was a contractor and could empathize with the bill's wanting to ensure building plans are set early. Even though two-thirds of legislators hail from the east side of the Missouri River, "they’re very engaged and understand the problems."
"It's much easier to govern when you're broke," Carlson said. "We have our needs in the east....But we also understand that we need to reinvest where the activity is."
Though Carlson was cordial in his discussion on the bill, he never fully admitted his support.
Sen. Connie Triplett, D-Grand Forks, said the Strategic Investment and Improvement Plan works best in a declining economy; in the bustling economy of today, revenue should be used as it arrives in state coffers.
"We should of gotten it out to ya'll last year," Triplett said.
Money should be spent now, as people residing in communities without without proper roads and housing and with issues such as overwhelming dust are becoming discontent with their surroundings.
"Different people are experiencing the oil boom differently," Triplett said. "It's not that anything is inherently wrong with Williston. It's just that maybe the pace of life is a little too fast right now, cost of living too much and dust is a little too much. All of it adds up to make it a less than desirable place."
Although she supported the bill, Triplett expressed concern over one-time funding mechanisms, saying it would create, "a different kind of east-west divide."
"It causes a disconnect between oil producing counties and non-oil producing counties," Triplett said. The Legislature, she added, must determine what expenditures should be financed by either the state or property taxes while figuring out permanent financial solutions to mitigate issues in the west.
In supporting a permanent solution, Wardner detailed another GOP proposed funding mechanism in the change of tax formula. The current formula, he said, sends 75 percent of gross production tax revenue to the state and 25 percent to political subdivisions.
If approved, the bill would change the formula to 60 percent local and 40 percent state, providing $2.2 billion during the 2015-2017 biennium. Wardner expects the state to receive $8.6 billion in total oil and gas tax revenue.
Williston would receive $64 million, instead of the $32.5 million it was given during the current biennium. Dickinson and Minot would get $39 million and $12 million; Bismarck and Fargo would be provided $2 million each.
The bill would also cut funding to the Energy Impact Grant program to $150 million for the 2015-17 biennium, down from $240 million this biennium.
While some city and county commissioners would miss extra funding, others have told Wardner, “You give us the 60/40, and we don't need the impact grant. We don't want the impact grant."
Carlson spoke on his three visits to the Bakken this summer and said the formula should be addressed, but it would take all 80 days of the session to figure it out.
"North Dakota is booming from border to border," Carlson said.