Oil tax growth is amazingThe numbers are astounding. North Dakota oil tax revenues in the past fiscal year are tracking to total more than twice what was forecast just a few months ago; $1.7 billion is nearly as much money in one year as the state was expecting in two years. If the trend continues, the state collections will total somewhere around $4 billion.
By: The Forum of Fargo-Moorhead, The Jamestown Sun
The numbers are astounding. North Dakota oil tax revenues in the past fiscal year are tracking to total more than twice what was forecast just a few months ago; $1.7 billion is nearly as much money in one year as the state was expecting in two years. If the trend continues, the state collections will total somewhere around $4 billion.
That $4 billion, with a “b.”
That’s one reality. The other is that because of legislative action and constitutional mandates, only about 16 percent of total revenues (under current law) go into the general fund from which lawmakers can appropriate. Nearly half is locked up in one form or another in constitutionally established funds. Another 17 percent is earmarked for local governments. Slightly more than 20 percent is reserved for property tax relief. So while the depth and breadth of the revenue stream are unprecedented, distribution formulas put the total in a more sober perspective.
That being said, lawmakers who poor-mouth the revenue picture are being disingenuous. The Legislature might not be able to readily access specific constitutional funds (the Legacy fund, for example), but legislators can make adjustments in most other funds to more realistically reflect changes in revenue expectations. Under no scenario can legislative leadership honestly suggest the state has to retreat into the penny-pinching modes of the past.
Tax relief certainly is on the agenda, but in what form? Property tax? After the resounding rejection of a ballot measure calling for repeal of the property tax, legislators might hesitate to adopt any plan that erodes local control. Income tax? Not every North Dakotan pays income tax, so it could be argued an income tax cut is unfair. Maybe reducing the state portion of the sales tax makes sense, since everyone pays sales taxes based on purchases.
But whatever lawmakers do when they convene in Bismarck a few months from now, don’t let them tell you the state does not have the money to invest in programs — education, roads, child welfare, research, environment, to name a few — that have been short-changed for generations.